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Asking prices fall 2% in a month – should buyers expect further drops?
High mortgage rates are hitting house prices
Sam covers personal finance topics, from the best savings rates to the reasons mortgage lenders say no. He enjoys crunching the numbers to help consumers get ahead.
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Stubbornly high mortgage rates and the summer slowdown have dented house prices, according to Rightmove analysis.
But how much should you read into an August dip? Could prices simply rebound in September, as they typically do after summer?
Here, Which? outlines the latest house price forecasts, explores the main factors behind the August dip and explains what could happen to mortgage rates over the next few months.
Why asking prices fell in August
The average UK asking price fell by 2% between July and August – the largest August drop since 2018, according to Rightmove. Asking prices are also down 1% compared with a year ago.
Rightmove says increased competition among sellers is one factor behind the drop. The number of homes for sale is at a 12-year high for this time of year. Combined with a quieter summer holiday period, this has led sellers to cut asking prices to catch buyers' eyes.
House price trends vary across the UK. In the North East, the average asking price rose by 0.6% month on month, making it the only region to record an increase since July.
At the other end of the spectrum, the average asking price in London has fallen by 4.4% since July and 3.1% over the past year.
Prices remain higher than in August last year in several regions, with annual growth concentrated in Scotland and the North of England.
| Area | Average asking price | Month-on-month change | Annual change | Average days to find a buyer |
|---|---|---|---|---|
| Scotland | £199,888 | -2.0% | +1.1% | 32 |
| Wales | £269,751 | -0.8% | -0.4% | 67 |
| East Midlands | £288,536 | -1.0% | -1.0% | 67 |
| East of England | £413,892 | -1.3% | -1.6% | 67 |
| London | £646,451 | -4.4% | -3.1% | 73 |
| North East | £198,109 | +0.6% | +1.7% | 52 |
| North West | £273,421 | -0.6% | +1.9% | 56 |
| South East | £469,604 | -2.1% | -2.1% | 69 |
| South West | £378,294 | -1.5% | -0.6% | 71 |
| West Midlands | £298,049 | -0.8% | +0.7% | 63 |
| Yorkshire and the Humber | £255,956 | -1.5% | +0.9% | 62 |
Source: Rightmove house price index, released 17 August. Data for Northern Ireland not available.
If you're considering selling your home, don't be too alarmed by headlines about falling house prices. Trends can vary significantly between regions and even local authorities.
To find out what's happening to house prices in your local authority, you can check Land Registry data. This is a more reliable measure of house prices, as it's based on sale prices rather than asking prices.
You can also use the Land Registry's 'price paid' tool to see how much properties have sold for on your street or within your postcode.
- Find out more: what's happening to house prices?
Will house prices bounce back in September?
Autumn is typically a busy time for the housing market, with house prices often rising as activity picks up. So will that happen this year?
We spoke to Tom Bill, head of UK residential research at Knight Frank estate agents. He told us a bounce is likely in September, but it is expected to be smaller than usual for the time of year.
High mortgage rates are one factor weighing on prices. For house prices to rise, mortgage rates would need to fall further, which is unlikely given continued uncertainty in the Middle East. Bill told Which? that he hasn't seen any indication there will be a 'meaningful' drop in mortgage rates in the short term.
Rightmove also points to high mortgage rates, geopolitical uncertainty and the first Budget from new Chancellor John Healey as factors behind the downgrade of its house price forecast for 2026. It now expects asking prices to fall by between 0% and 2% in 2026.
If you're keeping an eye on where prices are headed, other property portals and estate agents have updated forecasts. In June, Savills revised its estimate to a 2% fall in 2026. While Zoopla now expects 1% growth in asking prices.
These are forecasts for national averages, and the picture differs across the UK. If current trends continue, Scotland and the North of England are the most likely areas to record house price growth in 2026. In London, Wales and the South of England, prices are expected to fall.
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Find out moreWill mortgage rates continue to drop?
Rates are edging down, but borrowing remains expensive, and you shouldn't assume the downward trend will continue.
Geopolitical uncertainty has caused mortgage rates to fluctuate over the past few months, with periods of falling tensions followed by renewed escalation. Until conflict in the Middle East fully stabilises, we could continue to see periods of mortgage rate cuts followed by increases.
The best mortgage rates currently sit around 4%, according to Moneyfacts data. However, these deals are reserved for borrowers with at least 40% equity and require you to choose a variable rate. The lowest fixed-rate mortgages are currently around 4.5%.
If you're a first-time buyer with a 10% deposit, the best rates are around 4.7%. To find today's cheapest rates, whether you're a first-time buyer, moving home or remortgaging, check out our best mortgage rates page. We update our best rate tables daily.
- Find out more: cheapest mortgage lenders in July.
