London leads annual price falls as national supply hits 12-year peak
The average asking price of a newly listed home fell 2% in August to £364,999, according to the latest data from property listing platform Rightmove.
The drop of £7,360 is significantly larger than the 10-year August average of -1.3% and the biggest for that month since 2018. Average asking prices are now 1% below year-ago levels, the sharpest annual decline since December 2023.
5-year asking price trend
Average new seller asking price, UK (Rightmove)
Source: Rightmove
The number of homes available for sale is at its highest level for this time of year in 12 years. Rightmove attributed the steeper price reduction to sellers responding to that elevated supply during a traditionally quiet period for buyer activity, with those entering the market doing so at more competitive prices.
"This month's larger-than-usual August price drop is a sign that many sellers are recognising the reality of the market and pricing much more competitively from day one," said Colleen Babcock (pictured right), property expert at Rightmove. "Buyers have the widest choice of homes for sale at this time of year in more than a decade, so standing out on price for the right reasons is hugely important.
"While no seller likes to come to market lower than they might have hoped, Rightmove analysis shows that those who price realistically are statistically proven to be giving themselves the strongest chance of finding a buyer and successfully completing a move. One tactic some sellers are using when considering lower offers on their home, is to also make a lower offer themselves on their onwards purchase, to see if they can make up the difference."
Regional divergence
National figures mask a marked north-south divide. Average new seller asking prices across the northern regions of England rose 1.5% year-on-year, while southern England recorded a 1.8% fall. The North West saw the strongest growth nationally, up 1.9%. Scotland also posted annual price gains, while prices in the Midlands and Wales were only marginally lower than a year ago.
London recorded the largest annual decline of any area in Great Britain, at -3.1%. The capital's available supply has risen to its highest in 16 years, outpacing the national trend and intensifying competition among sellers. Rightmove noted a combination of factors bearing on London buyers: average property prices there are approximately 17 times the national average annual wage (this figure is unverified — readers should check against primary sources), mortgage affordability remains stretched at elevated rates, and stamp duty thresholds alongside the Lifetime ISA price cap of £450,000 weigh disproportionately on first-time buyers. A higher concentration of flats in the capital also adds complexity around leasehold costs and buyer confidence, contributing to longer selling times.
"National average prices are increasingly masking very different local market conditions," Babcock said. "While asking prices across both northern England and Scotland continue to edge upwards, southern England is moving in the opposite direction, with London seeing the biggest annual price fall.
"Alongside an abundance of choice, the capital faces greater affordability challenges for buyers, through both high price to income ratios and higher taxation."
Buyer activity
Overall buyer demand remains approximately 10% below last year's levels, though Rightmove recorded a 5% uptick following Andy Burnham's appointment as prime minister on 20 July. By comparison, the same period last summer saw a 2% fall in demand.
The current average two-year fixed mortgage rate stands at 5.09%, up from 4.92% the previous month, according to Rightmove's daily mortgage tracker. The portal said there are signs of some downward movement possible in the coming weeks, though geopolitical uncertainty and the new chancellor's autumn Budget add to broader market unpredictability.
In light of current conditions, Rightmove has revised its 2026 price forecast downwards, from growth of +2% to a range of between 0% and -2% for the full year.
"The mini Burnham bounce and some renewed general optimism have brought a degree of improvement to the market as a whole in recent weeks," Babcock said. "Whether that develops into a more sustained recovery will likely depend on confidence, mortgage rates and the new Chancellor's first Budget this Autumn."
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