House Price Index

Largest August price drop since 2018 despite mini bounce in buyer demand

The average asking price of a newly-listed property dropped by 2.0% (-£7,360) this month to £364,999, according to Rightmove data. This is a much larger drop than we’d usually see in August.

Summer sellers are cutting prices due to the quieter holiday period, and there are also more homes for sale in August than we’ve seen at this time of year since 2014. Rightmove data also shows that average house prices are now 1.0% lower than a year ago, the largest annual price drop we’ve seen since December 2023.

However, this average figure for the whole of Great Britain doesn’t reflect what’s going on at a regional level. House price growth for northern and southern regions of England are very different, with prices in the north of England up by 1.5% compared with a year ago. Scotland is also performing well, with 1.1% price growth year-on-year.

Meanwhile, prices in the south of England are down by 1.8% and by 3.1% in London, which saw the largest drop of any region in August. The capital has the largest choice of homes available to buy since 2010, so sellers are having to compete hard on price to try to tempt buyers.

The Burnham effect?

Since Andy Burnham became Prime Minister on July 20th, Rightmove data shows that buyer demand has increased by 5%.

Burnham’s announcement that he won’t be changing property tax in October’s Budget should help to give buyers more certainty into the autumn. However, it’s too early to say whether this could generate any lasting changes in the housing market.

Rightmove has revised its 2026 national average asking price forecast to between 0% and -2%. This reflects mortgage-rate movements, wider economic uncertainty and the potential impact of the forthcoming Budget.

(Forecasts are subject to change and should not be relied upon as a guarantee of future market performance)

What are mortgage rates doing?

Rightmove’s daily mortgage tracker shows that the average two-year fixed mortgage rate is 5.09%, up from 4.95% last month, as uncertainty continues in the Middle East.

Some market indicators suggest rates could move lower if conditions improve, but this is uncertain and will depend on lender pricing, rates and wider economic factors.

Matt Smith, our mortgages expert, explains:

“Confidence has taken a bit of a hit as fixed-rates remain elevated and return above the psychologically important 5% mark. However, the mortgage market remains highly competitive, with lenders still keen to attract business and support borrowers.

“Many lenders have built greater resilience into their pricing, meaning they are generally better prepared to absorb shorter-term market shocks, which gives movers more stability even during periods of uncertainty.”

The numbers at a glance

*Data provided by specialist mortgage technology provider Podium Solutions. The data covers 95% of mortgage lending, to exclude specialist lenders.

Expert comment

Colleen Babcock, property expert at Rightmove:

“This month’s larger-than-normal price fall reflects the reality of a market where buyers have plenty of choice and sellers are having to work harder to stand out and attract them. They’re also competing with an unusual number of distractions which have been keeping the minds of some potential buyers occupied, namely the World Cup and the hot weather.

“The first half of 2026 has been more challenging than many predicted, with the unexpected war in Iran contributing to higher mortgage rates and greater uncertainty for buyers. While activity remains below last year’s levels, it’s encouraging that the number of sales being agreed in the first half of the year is in line with 2024.

“Pricing remains critical, and it’s remarkable that nearly three-quarters of homes that have sold so far this year have done so without needing an asking price reduction.”

Average asking price trends

Monthly average asking price trend

This graph shows the 2.0% price drop seen in August to £364,999. This is the largest drop we’ve seen for this month in eight years.

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5 year asking price trend

This data shows average asking prices in the UK over the past five years. Here you can see the usual seasonal pattern for prices, including the usual dip over the summer.

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Monthly changes in average asking prices

Here we see how much house prices have increased or decreased each month over the past year. The 2.0% drop for August 2026 is more of a dip than we’ve seen for this time of year since 2018.

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Average stock per agent

Here we see the average of the number of homes per agent across the UK. The number of homes currently for sale is at a 12-year high for this time of year.

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Time to secure buyer (National)

Here we can see the monthly average number of days it takes for a seller to secure a buyer in the UK. In January this was 81 days, compared with just 60 days in May 2026.

This average gives an idea of how active the property market is, and how accurately people are pricing their properties. For example, properties that are priced too high will usually take longer to secure a buyer.

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Regional map

UK House Price Index by region

This map shows the UK house price index by region, showing how property price trends vary considerably for different parts of the UK. London saw the largest price drop of any region in August, with average asking prices falling by 4.4% compared with the previous month, and by -3.1% over figures from this time in 2025, according to Rightmove data.

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London trends

Time to secure a buyer in London

This graph shows the monthly average number of days it takes for a seller to secure a buyer in London. This gives an idea of how active the property market is there, and also how accurately people are pricing their properties in the Capital.

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Affordability trends

Average monthly amount spent on a first-time buyer home

On the graph below, the first-time buyer monthly mortgage payment is based on Bank of England data of the averages for 90% LTV two-year fixed mortgages from lenders, and the average asking price of a typical first-time buyer home (two bedrooms or fewer) using the Rightmove House Price Index. The equivalent monthly rent is calculated using the same property types (two bedrooms or fewer).

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Ability to afford a first-time buyer home

This affordability graph is based on the Average Weekly Earnings (AWE) dataset from ONS multiplied by 4.5 to get the typical maximum that a person can borrow from a lender. The average asking price of a typical first-time buyer home is taken from the Rightmove House Price Index.

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How do mortgage rates affect supply and demand for houses in the UK?

Mortgage rates affect supply and demand in the UK housing market by influencing buyer sentiment and appetite around borrowing.

Higher mortgage rates increase monthly payments for buyers. In response to those higher rates, buyers might increase the term of their mortgage or look at cheaper properties. Alternatively, they might delay their purchases or shift to renting, reducing demand and slowing transaction levels.

Interestingly, any period of uncertainty around rates is likely to cause buyers to pause. Even if rates go up, once they stabilise again, consumers tend to return to the market having adjusted their plans in line with the higher rates.

Similarly, if there is potential for a drop in mortgage rates, transaction levels will slow as consumers wait for a more certain outcome. Consistent lower mortgage rates may reduce monthly payments for some borrowers and could support buyer demand, although the impact will depend on individual circumstances and wider market conditions.

It is important to note, however, that a large number of UK property sales take place out of necessity. These do not get delayed as a result of changing rates. Similarly, around a third of all UK property transactions are made by cash buyers, so are not affected by mortgage rates.

Housing supply responds more slowly to changing rates. Higher mortgage rates can reduce the supply of new houses by making it more expensive to develop them, although existing stock may stay on the market longer.