The UK housing market is undergoing a significant rebalancing, shifting power dynamics firmly towards prospective buyers. Over the past three months, average asking prices have seen their sharpest decline in years, dropping by nearly £11,000. This notable correction is primarily driven by an increase in housing supply and a gradual easing of borrowing costs, fundamentally altering the market landscape.
According to property portal Rightmove, the average asking price across the United Kingdom fell by 1.3% in August to £368,740. This latest decrease follows steeper declines in June and July, marking the most pronounced three-month downturn observed. The trend reflects a broader recalibration of supply and demand, with over a third of properties currently listed having undergone price reductions. This correction unwinds momentum from prior stamp duty reforms and a tempered interest rate outlook.
- The UK housing market is currently undergoing a significant rebalancing, favouring prospective buyers.
- Average asking prices have seen their sharpest decline in years, dropping by nearly £11,000 over three months.
- This market correction is primarily driven by increased housing supply and easing borrowing costs.
- Over a third of currently listed properties have already undergone price reductions.
Buyer Advantages Emerge Amidst Market Shifts
The evolving market presents distinct buyer advantages. Housing supply has increased by nearly 10% year-on-year, reaching its highest level in almost a decade, offering wider selection. Borrowing costs have also eased; the average two-year fixed mortgage rate fell from 5.17% earlier in the year to approximately 4.5%. This follows three Bank of England Base Rate cuts in 2025, prompting competitive lender rates. Despite falling prices, the volume of agreed property deals rose by 8% compared to a year ago. Analysts caution that the central bank remains focused on addressing broader inflationary pressures, potentially limiting aggressive future easing.
Seller Strategies Crucial in Competitive Environment
Conversely, sellers face a considerably more challenging market. Expanded buyer choice intensifies competition, pressuring asking prices. Successful sales now hinge on strategic initial pricing. Rightmove data illustrates: competitively priced homes secure attention in 79 days, selling for 94% of their list price. In contrast, properties needing price reductions remain on market for 99 days. This underscores the necessity for sellers to price accurately from the outset, a notable shift from recent years’ seller leverage. Agents increasingly advise “attractive” initial pricing for swift interest.
Market Outlook and Expert Perspectives
In light of these shifts, Rightmove has adjusted its UK housing market forecast to a more modest 2% price increase for 2025, down from 4%. This reflects substantial supply, cautious buyers, and limited mortgage cost relief. Industry experts concur buyers now hold significant negotiation leverage. As interest rates trend lower, increased property availability further empowers buyers. For sellers, success in this competitive landscape depends on meticulous pricing and effective presentation. Colleen Babcock of Rightmove highlighted: “Buyers have the upper hand in this high-supply market, so a tempting price is vital to agree a sale.”
David Thompson earned his MBA from the Wharton School and spent five years managing multi-million-dollar portfolios at a leading asset management firm. He now applies that hands-on investment expertise to his writing, offering practical strategies on portfolio diversification, risk management, and long-term wealth building.