Asking price falls mask a more complicated picture on the ground

Asking prices across the UK housing market fell 2% in August to £364,999 – the sharpest drop for that month since 2018 – as buyer demand ran approximately 10% below last year's levels.

For Rhys Edwards (pictured top), mortgage consultant at Brooks Financial, the data broadly reflects what he has been seeing with his own clients, but he questions how accurately the national picture maps to conditions on the ground.

Data from Rightmove showed the £7,360 fall in average asking prices was significantly larger than the 10-year August average of -1.3%. The Bank of England held its base rate at 3.75% at its 30 July Monetary Policy Committee meeting, citing high and volatile energy prices driven by conflict in the Middle East as a key factor complicating the path for further cuts – a dynamic Edwards told Mortgage Introducer is feeding directly into mortgage pricing.

Edwards said the falls reflect a combination of pressures, but he was sceptical about the supply picture.

"Well, many things, to be honest," he said when asked what a fall in asking prices means for the market. "There are those clients who've been waiting to move, and the whole chain makes it worthwhile for them if they make their property a bit more desirable in the marketplace, so you've got market pressure. We have had a period of time where properties have not been shifting. It has been quieter."

Rightmove recorded available supply at its highest level for this time of year in 12 years, yet Edwards pushed back on whether that figure reflects conditions on the ground. "With my client base, I wouldn't necessarily agree with that. A lot of my clients have been struggling to find the right properties. I'm not actually seeing that there is an abundance of properties on the market or the right kind of properties."

Why sellers are accepting less

For clients who are ready to move, Edwards said price reductions are often driven by the logic of the chain rather than desperation.

"If you're selling your home, what we'll see is they may be able to negotiate a slightly reduced price on the upward new purchase. You have that knock-on chain where a lot of home movers will reduce their selling price because they have found their next home, so they can make it work at a slightly reduced price versus realistic pricing from estate agents."

The 10% buyer demand figure broadly matched Edwards's own experience. "That kind of matches roughly what I'm seeing on my own personal figures on my existing client base. I have been a little bit quieter at the back end of July and into August than certainly from the previous year."

What the north-south divide means for brokers

Rightmove's figures revealed a marked regional split, with northern England recording average annual price growth of 1.5% while southern England fell 1.8%. London posted the sharpest decline of any area in Great Britain, at -3.1%, with available supply in the capital rising to its highest in 16 years. Edwards said that pattern is familiar.

"The north-south divide is definitely there. London properties will be priced at the outset a lot higher, then there's a bit more negotiation. Clients are going for much larger reductions than certainly the northern properties."

Rightmove's daily mortgage tracker placed the average two-year fixed rate at 5.09% in August, up from 4.92% the previous month, but Edwards challenged the accuracy of published average rate figures, saying they do not reflect what is available across the market. For brokers working with UK mortgage clients navigating the current market, the gap between headline averages and live product rates is a persistent issue.

What Edwards was clear on was the direction of travel, and its cause. "Rates are slowly coming down at the moment. The swap rates have got a direct correlation with everything that's happening with things in the Middle East. Some lenders increased nearly half a percent. That has now started to be reduced – some lenders increased, and then two days later, they reversed all those increases. If things remain stable, we will continue to see some further decreases."

Five-year fix shock holding back movers

Perhaps the sharpest observation Edwards offered concerned borrowers who took out five-year fixed rates during the era of historically low rates, now facing a stark adjustment at remortgage. For brokers tracking residential mortgage activity in the UK, this cohort represents a growing drag on market movement.

"Clients who took five-year fixed rates are still having that effect of coming off from a 1-point-something to a 4-point-something, which is a big shock to the budget. Anyone who thinks they need a slightly bigger house, you've just come off a five-year fix that was costing you £600 a month, but it's going to go up to over £1,000, maybe think of moving next year or in a few years' time."

Rightmove revised its full-year 2026 asking price forecast for UK homes downwards, from growth of +2% to a range of between 0% and -2%. For Edwards, the outlook hinges on rates, and on clients staying the course rather than waiting indefinitely.

"News that rates are coming down has a big direct correlation between more enquiries, more clients asking questions. I had clients contacting way in advance of their deals ending because they are concerned about rates. It's certainly at the forefront of people's minds and budget all the time."

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