Rightmove data shows a steeper-than-usual July price fall as a new prime minister, elevated rates, and subdued buyer activity weigh on the market
The imminent change of prime minister has added a fresh layer of uncertainty to a housing market already contending with elevated mortgage rates, subdued buyer activity, and near-record supply levels.
Rightmove's latest data shows the average asking price of a newly listed home fell by 1% (£3,832) in July to £372,359 — a decline five times steeper than the 10-year average July drop of 0.2%.
Industry professionals are hoping the incoming administration will make housing a priority, saying stamp duty reform, improved market mobility, and progress towards the 1.5 million new homes target should be urgent areas for action.
Rightmove warned that prolonged policy speculation — including rumours of a land value tax replacing stamp duty and council tax — risks deterring prospective movers who may hesitate for fear of acting at the wrong time. The property platform's data shows the number of new developments coming to market is at its lowest level since January 2017.
Five-year asking price trend
Source: Rightmove, July 2026
Summer distractions and high supply
Beyond the political backdrop, buyer activity has been dampened by the summer holiday season, the World Cup, and a succession of heatwaves. Although the number of homes available for sale is 1% below the same point last year, it remains near a 12-year high for the time of year. Rightmove's data shows the first heatwave in May caused a temporary 8% drop in buyer demand, followed by a 6% decline during June's heatwave and a further 4% dip in the current July heatwave.
"This month's larger-than-normal price fall reflects the reality of a market where buyers have plenty of choice and sellers are having to work harder to stand out and attract them," said Colleen Babcock (pictured right), property expert at Rightmove.
"They're also competing with an unusual number of distractions which have been keeping the minds of some potential buyers occupied, namely the World Cup and the hot weather. While these diversions are short-term, they're adding to what is already a distracting summer holiday period to create a challenging selling environment."
Sales volumes and pricing strategy
The number of sales agreed in the first half of 2026 was 6% lower than in the same period last year, following disruption caused by the outbreak of conflict in Iran, which pushed already elevated mortgage rates higher. Sales agreed nonetheless remained broadly level with 2024, suggesting buyers are still proceeding when a property and its price meet their needs.
Rightmove's analysis underlines the importance of accurate initial pricing. Nearly three-quarters (74%) of homes that successfully sold and completed this year did so without any asking price reduction. Homes requiring a reduction spent an average of 127 days on the market, compared with 36 days for those that sold without one.
Mortgage rates and economic backdrop
The average two-year fixed mortgage rate currently stands at 4.92%, up from 4.25% in February before the Iran conflict began, though down slightly from 5.07% last month. Lenders are competing actively to attract borrowers, wage growth continues to outpace house price inflation, and unemployment remains low — factors Rightmove described as leaving room for optimism in the second half of the year.
"The first half of 2026 has been more challenging than many predicted, with the unexpected war in Iran contributing to higher mortgage rates and greater uncertainty for buyers," Babcock said.
"While activity remains below last year's levels, it's encouraging that the number of sales being agreed in the first half of the year is in line with 2024. Pricing remains critical, and it's remarkable that nearly three-quarters of homes that have sold so far this year have done so without needing an asking price reduction.
"A new Prime Minister also presents an opportunity to make housing a renewed priority, with action needed to support affordability, mobility and the delivery of more homes."
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