House prices fall to attract summer buyers

The average price of newly-listed homes for sale has fallen by 0.6 per cent this month to £376,191, the biggest June fall in 14 years, according to property platform Rightmove.

Experts believe the average drop of £2,113, leaving prices 0.5 per cent below a year ago, comes as sellers look to entice summer buyers.

While June typically sees modest price increases, with a 0.1 per cent average over the last 10 years, this month’s decline suggests that many new sellers are adjusting their price expectations in response to high levels of competition and more price-sensitive buyers.

Summer is typically slower than the spring, with more buyers distracted by sporting events, holidays and better weather, and therefore needing to be tempted by sellers with an attractive price.

However, the national price trend doesn’t always reflect regional and local market differences, particularly where affordability pressures vary.

Prices have fallen across all southern England regions and Wales, while the more affordable northern areas, such as the North East and Scotland are holding up better compared to this time last year.

The number of homes for sale remains at historically high levels for this time of year, driving price falls as competition to attract a buyer remains fierce among sellers.

In a market where choice is high and buyers are more selective, pricing correctly from the outset is increasingly important, with over a third of new listings that come to market not going on to sell.

Colleen Babcock, 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.”

May’s unusual heatwave kick-started summer earlier than usual this year, and the World Cup may prove to be a summer distraction for home-movers. Meanwhile, there is still ongoing economic challenges and global uncertainty.

Buyer demand across the month of May is down 10 per cent year-on-year but remains broadly in line with what we’ve seen so far this year.

Higher mortgage rates are continuing to weigh on activity as many household budgets are squeezed, while the wider choice of homes for sale is encouraging buyers to take a less urgent approach unless a property really stands out on its price or presentation.

The number of new listed homes coming to the market for sale is down by five per cent compared with this time last year, which is another suggestion that the market is settling into its typical seasonal pattern a little earlier than usual.

However, the number of listings remains higher than in recent years, up six per cent on 2024 and 12 per cent on 2023.

Despite headwinds, sales activity remains steady overall, with the number of sales agreed down six per cent year-on-year, but broadly in line with recent years, virtually the same as 2024 and five per cent above 2023.

Mortgage affordability has improved slightly this month, with Rightmove’s daily mortgage tracker showing that the average two‑year fixed rate has fallen to 5.07 per cent, from 5.18 per cent at this time last month, reducing the average monthly mortgage payment by around £30.

“While the summer market has come a bit early this year, overall activity is still within a typical historic range,” she continues.

“What has changed is some buyer behaviour; with more homes to choose from and higher borrowing costs, buyers are deliberating more and taking longer over their decisions.

“Sales activity remains stable, but it’s a very price-sensitive market with buyers looking out for the right property at the right price.

“It’s encouraging to see another slight reduction in average mortgage rates this month, which is a small step in the right direction for affordability and market sentiment.

“While rates remain elevated, even modest changes can make a difference to buyers’ budgets and confidence.”