The UK housing market cooled further in August, with asking prices, sold prices and buyer appetite all pulling back as the number of homes on the market climbed to one of its highest levels in years.
Asking and Sold Prices Both Slip
Rightmove’s House Price Index recorded a monthly fall in the average new seller asking price during August, as sellers recalibrated expectations amid intensifying competition for buyers.
Sold price data tells a similar story. Nationwide’s tracker also showed a dip in the average UK house price compared with the previous month. The gap between the two measures asking prices running well above completed sale prices is a reminder that list prices are opening positions rather than a reliable guide to what homes are actually changing hands for right now.
Supply Near a Multi-Year High
Behind the price falls sits a simple supply story. The number of homes available for sale has climbed close to its highest level in over a decade, according to analysis from MoneyWeek. More choice on the market hands buyers greater negotiating leverage, and sellers who want a sale are having to price more competitively to stand out among a larger pool of listings.
Mortgage Rates Keep Affordability Tight
Borrowing costs remain a central pressure on the market. Average two-year fixed mortgage rates remain elevated, with wider economic and geopolitical uncertainty keeping lenders cautious on pricing. That continues to weigh on buyer purchasing power compared with earlier in the year, and it’s a key reason why higher supply hasn’t translated into stronger price growth, many would-be buyers simply can’t stretch as far as they could twelve months ago.
A Two-Speed Market by Region
Regional performance continues to diverge sharply. The north of England and Scotland are still seeing annual price growth, while the south of England is moving in the opposite direction. London is seeing the steepest annual falls of any region.
The pattern reflects an affordability squeeze that’s hitting harder in already-expensive southern markets, while relatively lower price points in the north and Scotland are cushioning the impact of higher mortgage rates.
What It Means Going Forward
With supply elevated and mortgage rates showing little sign of easing quickly, the balance of power currently sits with buyers rather than sellers, particularly in London and the south. Sellers pricing realistically from the outset are likely to fare better than those testing the market at last year’s levels. For buyers, especially in higher-supply areas, there may be more room to negotiate than at any point in recent years.
Sources: Rightmove House Price Index, Nationwide House Price Index, MoneyWeek.