House sellers are reducing asking prices at the fastest rate for a July in a decade as increased competition and a distracted summer market make it harder to secure buyers.
The latest Rightmove House Price Index shows the average asking price of a newly listed home fell by 1.0% (£3,832) this month to £372,359, a much steeper decline than the ten-year July average of 0.2%.
The property portal said sellers are competing in a market where the number of homes for sale remains close to a 12-year high, despite stock levels being 1% lower than a year ago. At the same time, buyers have faced a combination of summer holidays, the World Cup, heatwaves, higher mortgage rates and political uncertainty.
While the market has slowed compared with last year, Rightmove said many of the underlying fundamentals remain positive. Sales agreed during the first half of 2026 were 6% lower than the same period in 2025, but were broadly in line with the first six months of 2024. The average two-year fixed mortgage rate has eased slightly to 4.92%, down from 5.07% last month.
MARKET REALITY
Colleen Babcock (mina picture, inset), property expert at Rightmove, says: “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.
“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.”
Rightmove’s analysis also found that pricing correctly from the outset is becoming increasingly important. Nearly 74% of homes that have sold and completed so far this year did so without an asking price reduction, while homes that required a price cut spent an average of 127 days on the market, compared with 36 days for those that sold without a reduction.
PRICING CRITICAL
Babcock adds: “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. 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.”
Matt Smith, Rightmove’s mortgage expert, said: “Mortgage rates are higher than many buyers would have hoped for at the start of the year, and the increases due to the war in Iran have understandably dented confidence for some.
“However, lenders remain keen to lend, and the mortgage market is still competitive. There is still uncertainty in the market, and recent mortgage cuts could stop in the near future, however we’re not seeing the kind of difficult lending conditions that have caused more challenging markets in the past.
“If the outlook shifted and we saw reductions in mortgage rates, it would be a welcome boost to confidence and affordability.”
INDUSTRY REACTION
Nathan Emerson, CEO of Propertymark, says: “While the year initially started with optimism in the housing market, global unease has in many ways dominated the agenda ever since.
“Rightly so, many consumers have been exercising greater caution with their spending to help ensure household budgets are better protected against unforeseen increases in expenditure.
“In recent months, we have witnessed mortgage borrowing dip significantly, alongside a lower volume of new mortgage approvals.
“All eyes will be firmly focused on the Bank of England at the end of the month as it makes its next decision on the base rate, something that will very much set the tone, especially for those considering their next house move or who have tracker mortgage products.”
CHALLENGING MARKET
Chris Thomas, Managing Director at Wiglesworth & Co. Estate Agents in Leamington Spa, Warwickshire says: “The market is certainly more challenging than at this time last year.
“However, in saying that, given the increases to mortgage rates we’ve seen in the first half of this year due to the war in Iran, I think the market has actually held up better than many expected.
“In the type of market we’re in currently, there are some clear rules that sellers need to follow to successfully find a buyer.
“Firstly, accuracy of pricing is everything and getting the price right the first time gives sellers the best chance.
“Secondly, sellers need to choose an agent who knows the local area and market extremely well and has a proven strong track record of giving honest and professional advice.
“There are still buyers active in the market and positive signs that mortgage rates could be easing. If sellers stick to these principles, they have a good chance of being successful.
POLITICAL UPHEAVAL
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “These figures are particularly timely as they reflect whether sellers’ asking prices have responded realistically to the recent dip in buyer demand. The answer is ‘not bad but could do better!’
“Continuing uncertainty prompted by present domestic political upheaval and possible resultant uplift in some taxes – or maybe even reductions to others – is adding to previous concerns about the Iran war’s impact on interest rates and the cost of living.
“Bearing in mind approximately four out of five sellers are also buyers, we are finding it is only homeowners who recognise the importance of concentrating on the difference between selling and buying prices, not the headline figure, which is looking increasingly unlikely to be achieved.”
