The average asking price of newly-listed homes for sale has fallen by 1.0% this month to £372,359, the latest figures from Rightmove show. While a price drop in July is normal, this month's fall is much larger than the ten-year average July fall of 0.2%.
Sellers are having to compete harder to attract distracted summer buyers in the current market, where supply is high. Although the number of available homes for sale is 1% below this time last year, it is still very close to a 12-year high for the time of year.
Home-movers are always distracted by the summer holiday season, but this year the World Cup and the unusually hot summer have also contributed to lower activity levels. Rightmove analysis shows that the first heatwave in May caused a temporary 8% drop in buyer demand before rebounding, while June's heatwave caused a similar temporary decline of 6%, followed by a 4% dip during the current July heatwave. Political change has added another layer of uncertainty to the market, at a time when buyers are already distracted.
Market activity levels remain below this time last year, with this year’s mortgage rate increases as a result of the war in Iran contributing to challenging conditions in the first half of the year.
The number of sales agreed in the first half of the year was 6% lower than the same period in 2025, however it was level with the first half of 2024, indicating that many buyers are still being tempted if the property and price meet their housing needs.
The average two-year fixed mortgage rate now stands at 4.92%, up from 4.25% in February before the war in Iran began, but a small drop from 5.07% last month.
Rightmove says many of the fundamentals supporting the housing market remain positive, stating "lenders are competing strongly to lend, wages continue to rise faster than house prices which is helping buyer affordability, and unemployment remains low". These factors leave room for optimism in the second half of the year, it says, particularly if mortgage rates see further falls and average wage growth continues to outpace house prices.
Colleen Babcock, property expert at Rightmove, commented: “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. While these diversions are short-term, they’re adding to what is already a distracting summer holiday period to create a challenging selling environment.
“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. A new Prime Minister also presents an opportunity to make housing a renewed priority, with action needed to support affordability, mobility and the delivery of more homes.”
