July Sees Sharpest House Price Drop in Over Two Decades But Buyer Demand Holds Steady
In a surprising shift for the property market, the average asking price of a home in Great Britain has fallen by 1.2% this July, bringing it to £373,709. That’s a drop of £4,531 – and the steepest price fall recorded for this month in over 20 years.
But despite the headline figures, the picture isn’t all doom and gloom. Sales activity is actually on the rise, with the number of homes marked as sold up 5% compared to the same time last year. Similarly, buyer engagement remains strong, with 6% more people reaching out to estate agents this month than in July 2024.
What’s Behind the Price Drop?
While a seasonal dip in prices is common during the summer holidays, this year’s sharper decline is largely being driven by increased supply. With more homes on the market than we’ve seen in over a decade, sellers are being pushed to price competitively in order to capture buyer attention. It’s a buyer’s market, and those listing their homes are having to work harder—and price smarter—to stand out.
How Are Buyers and Sellers Responding?
Interestingly, the broader market continues to show healthy levels of activity. Many buyers are taking advantage of the increased choice and improved mortgage rates, while sellers who price competitively are finding that serious buyers are ready to move quickly.
Colleen Babcock adds:
“Even after the stamp duty deadline passed, we’re seeing more buyers entering the market than last year, and more sales are being agreed. It’s been a stronger start to the year than many expected.”
Should You Move Now?
Whether you’re a buyer or a seller, the current market presents both opportunities and challenges. For buyers, the increase in available stock and the slight easing of prices mean more room for negotiation. Meanwhile, earnings are up more than 5% year-on-year, while average house prices are just 0.1% higher than last year—further tilting the scales in buyers’ favour.
For sellers, setting the right price from day one is essential. Overpricing can backfire in this competitive landscape, often leading to the need for later reductions and slower sales.
Looking ahead, the overall outlook remains positive but measured. With such a high volume of homes on the market, we’ve revised our 2025 price forecast down from +4% to +2%. Still, we anticipate ending the year with roughly 1.15 million completed transactions, indicating a resilient, if more balanced, housing market.
What Does This Mean for the Rental Market?
The rental market is also progressing upward, with the average UK rent in June around £1,826 per month, up from £1,758 a year ago. While rents continue to increase, there are early indications that rising supply and affordability pressures are beginning to ease the speed of rent growth in some cities. Landlords should watch for signs of balance returning to the rental market as more properties become available.
