House sellers have made the biggest June price reduction in 14 years as rising stock levels, economic uncertainty and an early summer slowdown force vendors to compete harder for buyers.
The latest Rightmove House Price Index shows the average asking price of a newly listed home fell by 0.6% (£2,113) this month to £376,191. It is the largest June monthly fall since 2012 and leaves average asking prices 0.5% lower than a year ago.
The number of homes for sale remains at historically high levels for this time of year, creating fierce competition between sellers.
Rightmove says more than a third of new listings fail to find a buyer, increasing pressure on vendors to price realistically from the outset.
WARM WEATHER
Buyer demand during May was down 10% year-on-year, although Rightmove points out that activity was impacted by the unusually warm weather during the half-term holiday period.
New listings were also down 5% compared with last year, although stock levels remain 6% higher than in 2024 and 12% above 2023.
Despite weaker demand, sales agreed are holding up relatively well, down 6% year-on-year but broadly in line with 2024 levels and around 5% ahead of 2023.
ECONOMIC UNCERTAINTY
Colleen Babcock (main picture, inset), Property Expert at Rightmove, says: “It’s unusual to see a price fall of this size in June, as we would normally expect to see modest price growth at this point in the year.
“What’s different this time is a combination of factors, including wider economic uncertainty, the timing of the May bank holiday and unusual heatwave, and the high number of homes on the market, which together appear to be bringing forward the traditionally slower summer market.
“In this kind of market, sellers need to work harder to attract attention. Setting a competitive asking price from the outset is key, as buyers are taking more time to compare options and are quick to move on if a home doesn’t stand out on value.
“When sellers are over-optimistic on price and find they need to reduce later to sell, it can be harder to regain momentum, which underlines just how important it is to get the pricing right from day one.”
RATES EDGING DOWN
Mortgage affordability improved slightly during the month, with the average two-year fixed rate falling from 5.18% to 5.07%.
Matt Smith, Rightmove’s mortgage expert, says: “It’s encouraging to see mortgage rates edging down slightly, and even relatively small reductions can make a difference to buyers’ budgets.
“While rates remain higher than the lows of recent years, they have been relatively stable over a sustained period, which is helping to provide more certainty for those planning a move.
“There is still some underlying volatility in the economic and global market, which means rates could move slightly in either direction from here.
“However, the key takeaway for buyers is that we’re currently in a period of greater stability than we’ve seen previously, and that stability can help support confidence, particularly for those who are close to affordability limits and weighing up their next step.”
INDUSTRY REACTION
Nathan Emerson, CEO of Propertymark, says: “The latest figures suggest the market is continuing to find a more sustainable balance, rather than experiencing a loss of confidence.
“Buyers remain active but are taking more time to make decisions, meaning realistically priced homes continue to attract strong interest.
“National trends also mask significant regional differences, with local affordability, supply levels and demand continuing to shape market performance. In many areas, particularly where stock remains constrained, well-presented and competitively priced properties are still selling well.
“This reinforces the importance of professional advice. Accurate pricing and a strong understanding of local market conditions are helping buyers and sellers navigate a more competitive marketplace.
“While further improvements in mortgage affordability would support confidence, the overall level of transactions shows there remains a solid appetite to move despite ongoing economic pressures and seasonal distractions.”
PRICE SENSITIVE
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “In our offices, sellers wanting to attract genuine buyers have been obliged to accept a larger dose of realism when it comes to asking prices, which are increasingly recognised as an aspirational starting point only.
“The amount of available stock – particularly flats – as well as concerns about the cost of living and mortgage rates, are making first-time buyers nervous about making financial commitments so the market is becoming even more price sensitive.
“Most sales are holding up but that lingering uncertainty about economic prospects is prompting lengthier transactions, which in turn increases the risk of further re-negotiation or even collapse.”
STOCK OVERSUPPLY
Marc von Grundherr, Director of London agent Benham and Reeves, says: “Buyers aren’t moving at the pace we’ve seen in previous years, largely because current market conditions and an oversupply of stock are affording them the luxury of both time and choice.
“A larger than usual dip in asking prices also suggests that sellers are finally accepting this reality and pricing to sell, rather than pricing according to their own expectations.
“So, whilst a quick sale is certainly still achievable, sellers shouldn’t be disheartened if they don’t find a buyer immediately.
“Today’s market rewards patience, pragmatism and proper pricing, and those sellers who embrace these realities are the ones most likely to achieve a successful outcome.
MARKET SPLIT
Henry Crane, Partner at Birmingham-based James Laurence Estate Agents, says: “From our perspective across the Midlands, we’re seeing a clear split in the market.
“Leasehold properties, particularly those with service charge increases or lease issues, are seeing softer demand and less urgency from buyers.
“In contrast, the freehold market is moving at a quicker pace. Well -presented, sensibly priced freehold homes are attracting strong interest and continue to sell quickly and competitively, effectively operating within their own micro-climate.
“Overall, while demand remains, it is highly price -sensitive and selective, with the best-positioned homes continuing to perform strongly.”
IMPROVED CONFIDENCE
Matthew Harvey, Partner at Cotswolds firm Tayler & Fletcher, says: “The Cotswolds market remains resilient.
“Demand is strong from early retirees downsizing into central locations, as well as families drawn by schooling, across both the £300k–£400k and £500k–£1m segments.
“As we move into early summer, transactions are picking up, supported by improved confidence around borrowing rates.
“The lower middle market is absorbing increased supply, driven in part by landlords exiting, with well priced homes attracting family buyers looking for more space. Demand in the higher middle market remains steady, led by lifestyle and schooling needs.
“At the top end, price adjustments are largely a correction of earlier overpricing following the post Covid surge.
“Overall, realistically priced homes are selling well, with many recent listings already finding buyers. While stock is higher year -on-year, sales levels are also ahead, pointing to a more positive underlying market than headline figures may suggest.”
FIRST-TIME BUYER OPPORTUNITY
Polly Ogden Duffy, Managing Director at John D Wood & Co. in London, says: The Spring market is split in two.
“Well-priced family homes, particularly in sought-after school catchments, continue to attract strong interest and can still achieve multiple bids.
“In contrast, the flat market is firmly in buyers’ favour, with high supply giving purchasers greater choice and negotiating power.
“Asking prices are adjusting, and homes that aren’t priced correctly risk sitting without interest.
“For sellers, pricing competitively from the outset is essential. Sensibly priced homes are still selling quickly to motivated buyers, while overpricing can cause properties to stall.
“For first-time buyers, this represents one of the better windows of opportunity in recent years, with more choice and greater scope to negotiate.”
SOFTER NUMBERS
Tom Bill, Head of UK Residential Research at Knight Frank, says: “The Middle East conflict has sapped seasonal momentum from the housing market.
“Prices and transaction numbers are softer than expected for the time of year as higher mortgage rates take their toll on buyers.
“Activity will be kept in check for the foreseeable future as the Bank of England holds rates steady and political uncertainty ramps up after this week’s by-election, which means we expect modest UK house price growth of 1.5% this year.”
