The average asking price for newly listed homes in Britain fell by £7,360 in August to £365,000, according to property portal Rightmove. The two per cent monthly decline is the largest August drop recorded in eight years, driven by subdued buyer demand and rising mortgage rates.
Rightmove data shows sharpest August fall since 2018
Rightmove said that for Britain as a whole, average newly listed asking prices had fallen by two per cent over the past month. The figure represents a two per cent decrease compared with the same time last year, bringing the typical new listing to £365,000.
The property website highlighted that the drop is the steepest for an August since 2018, reflecting a market under pressure from affordability constraints and economic uncertainty.
Tax speculation and global unrest weigh on market
Tom Bill, of Knight Frank, said the Labour Party government was “likely to fund its spending commitments by increasing taxes on wealth and assets”. He added: “The unpredictable events in the Middle East mean there is nothing to suggest mortgage rates will drop materially in the short term, which should continue to keep a lid on prices this year.”
Bill also noted that the new high-value council tax bands introduced in November’s Budget “increasingly look like introductory rates” in light of expected tax rises on wealth and assets.
Jeremy Leaf, a north London estate agent, said speculation about possible tax changes in the Budget is “inevitably weighing on decision-making in a price-sensitive market”. Edward Rook, of Knight Frank in Sevenoaks, added: “There appears to be limited understanding of the impact that tax speculation has on the market. Uncertainty stagnates markets and recent policy signals have compounded this.”
Warm weather and affordability concerns hit demand
Ian Harris, of trade body Propertymark, said the warmer weather had also played a part in dwindling buyer demand. “We have seen global unrest influence household spending, the warm weather potentially impacting viewings, as well as raised concerns around longer-term affordability in areas such as energy prices,” he said.
Harris added: “Although we have seen the base rate hold steady and inflation dip, it has not been enough to ignite wider consumer confidence.” The combination of these factors is expected to continue restraining price growth for the remainder of the year.
