Market activity up as affordability improves for buyers
The average asking price for newly listed homes in Great Britain declined by 1.2% (£4,531) this month to £373,709, according to the latest data from Rightmove.
This marks the steepest July decrease in more than two decades, as a high volume of properties for sale and the onset of the summer holiday period continue to suppress price growth.
Rightmove said the elevated supply of homes, which has reached a decade high, has made it more challenging for sellers to attract buyers’ attention during the summer. While similar price drops in previous years have sometimes signalled a slowing market, the current reduction appears to be improving affordability and encouraging more buyer enquiries, leading to year-on-year growth in agreed sales.
Competitive pricing is driving increased market activity. The number of agreed sales is up 5% compared to the same period last year and is at its highest July level since 2021. Enquiries from potential buyers have also risen by 6% year-on-year.
Improved affordability is another outcome of subdued price trends: the average asking price is now just 0.1% higher than a year ago, while average earnings have grown by more than 5%. Rightmove’s mortgage tracker shows the average two-year fixed mortgage rate has dropped to 4.53%, down from 5.34% a year earlier, resulting in nearly £150 in monthly savings for buyers with a 20% deposit purchasing at the average price.
“We’re seeing an interesting dynamic between pricing and activity levels right now,” said Colleen Babcock (pictured right), property expert at Rightmove. “The healthy and improving level of property sales being agreed shows us that there are motivated buyers out there who are willing to finalise a deal for the right property.
“What’s most important to remember in this market is that the price is key to selling. The decade-high level of buyer choice means that discerning buyers can quickly spot when a home looks overpriced compared to the many others that may be available in their area. It appears that more new sellers are conscious of this and are responding to this high-supply market with stand-out pricing to entice buyers and get their home sold.”
The national trend masks regional differences. London experienced the largest monthly price decrease at 1.5%, particularly in Inner London. Rightmove noted that the April increase in residential stamp duty in England has had a greater impact in London, where property values are higher.
Changes to non-dom tax rules and uncertainty about future tax policies may also be influencing investment in central London. In contrast, the North East, the country’s most affordable region, saw a 1.2% rise in prices, continuing a pattern of stronger growth in lower-priced areas.
Rightmove has revised its 2025 forecast for average asking price growth from 4% to 2%, citing strong buyer activity but persistent high supply as limiting factors. The company maintains its projection of 1.15 million property transactions for the year. The outlook for the second half of 2025 remains positive, with further improvements in affordability expected if two additional bank rate cuts materialise.
“It’s been a promising first half of the year for activity levels, particularly when you consider that some will have brought their plans forward to try to avoid added stamp duty from April,” Babcock said. “Even after the stamp duty deadline, we’re seeing more sales being agreed and more new potential buyers entering the market than at the same time last year.
“Still, the knock-on effect of high buyer choice is slower price growth, so we’re revising down our prediction of how much the asking price of a home will increase over the whole of the year.”
“Looking ahead to the second half of 2025, there will still very likely be the usual quieter seasonal periods around the summer holidays and Christmas, but we expect market activity to continue to be resilient.”
Nathan Emerson, chief executive officer at Propertymark, agreed that the market is now stabilising following recent stamp duty changes.
“As we enter the summer months, when the housing market tends to achieve a peak in sales activity, it is good to see yet further resilience in house prices year on year,” he added.
“We have seen encouraging signs from Rachel Reeves’ Leeds Reforms which are designed to potentially better help lenders serve those on lower incomes. However, such reforms alone will not help keep house prices manageable without the UK government and the devolved administrations meeting their individual housing targets to keep pace with real world demand.”
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