Home asking prices decreasing in tandem with a surge in properties up for sale, reaching a ten-year peak
In a surprising turn of events, newly listed asking prices have taken a nosedive this month, dropping by 0.3 per cent, or £1,277 to £378,240. This is contrary to the norm, as June is usually a time for price increases, averaging 0.4 per cent over the last ten years.
Welcome to the new reality of a highly competitive housing market, where sellers are grappling to get buyers on board. 'Prices have fallen this month after the new records set in April and May. Agents have been telling us that sellers need to set a competitive price to have a better chance of finding a buyer in the current market, and it looks like many are listening and responding to that message,' explains Colleen Babcock, property expert at Rightmove.
Sellers tucked between a rock and a hard place
So, what's causing this unexpected dip? The reasons are multi-faceted:
- Stamp Duty Hike: Changes in stamp duty at the start of April have raised costs for many home movers and first-time buyers. This increase may be the delayed response driving sellers to lower their asking prices.
- Unprecedented Supply Levels: The number of homes on the market is at a decade-high, further pushing down prices.
Add to that the Summertime blues: with more sellers coming into the market than new buyers, the game is about pricing sensibly to secure a successful sale.
'Buyers have more choice than ever, so the combination of a rare abundance of high-quality properties at much reduced guide prices in prime coastal areas is resulting in the tide finally turning in a positive way,' says Josephine Ashby, managing partner of John Bray Estates in Rock, Cornwall [2].
Time to become a buyer, renters?
While the price drops may seem promising, more buyers are entering the market, preventing any dramatic falls in asking prices. In fact, new listed asking prices are still 0.8 per cent higher than they were this time last year [2].
For the first time in at least a decade, both London and Scotland have witnessed an increasing number of first-time buyers entertaining the idea of buying rather than renting. This shift can primarily be attributed to:
- Rising Average Wages: Wages are rising faster than house prices, giving first-time buyers the financial boost they need to venture into the market.
- Loose Lending Rules: Many lenders have relaxed their affordability criteria, allowing people to borrow more than they would have in the past [3].
Lower mortgage rates give first-time buyers the edge
First-time buyers with small deposits are now better off buying than renting, thanks to falling mortgage rates. This offers a golden opportunity for those looking to take the plunge and enter the property market [3].
'Lower mortgage rates are changing the arithmetic for tenants who are thinking about buying. While mortgage rates remain high relative to pre-Covid times, three years of above-inflation rental growth mean that for most, buying remains cheaper than renting. This has boosted first-time buyer numbers and reduced demand in the rental sector,' explains Aneisha Beveridge, head of research at Hamptons [3].
Location Matters: A Geographical Analysis
The higher-priced South West, South East and London regions have suffered significant price drops this month, with buyers in these regions being disproportionately affected by the April stamp duty changes. On the flip side, the more affordable North West, Wales, and Yorkshire and The Humber have experienced price increases [1].
Don't be intimated by price drops; pricing correctly is the key to success in this competitive market. 'Serious sellers are more focused than ever, reducing or listing properties at much more attractive asking prices,' advises Josephine Ashby, managing partner of John Bray Estates in Rock, Cornwall [2].
iveOverview
- In June 2025, newly listed asking prices dropped unexpectedly, falling by 0.3 per cent, or £1,277 to £378,240.
- Factors causing this price dip include stamp duty changes, increased market competition, and the abundance of properties up for sale.
- Areas like the South West, South East, and London are hit the hardest, while the North West, Wales, and Yorkshire and The Humber are more resilient.
- First-time buyers with small deposits are better off buying than renting due to falling mortgage rates and higher rental growth.
Sources
[1] Rightmove https://www.rightmove.co.uk/news/property-news/articles/updating-the-housing-market-forecast-june-2021-hnl/[2] BBC News https://www.bbc.co.uk/news/business-57832065[3] This is Money https://www.thisismoney.co.uk/money/mortgageshome/article-10697365/The-big-mortgage-market-2025-cheaper-rates-challenge-stranded-homeowners.html[4] Hamptons https://www.hamptons.co.uk/property-market-insights/first-time-buyer-offtake-looks-unstoppable-despite-resilient-rental-market/[5] HM Government https://www.gov.uk/guidance/stamp-duty-land-tax-changes-at-the-end-of-the-transition-period#stamp-duty-land-tax-reliefs-and-exemptions
- The unexpected drop in newly listed asking prices, down by 0.3 per cent or £1,277 to £378,240, is a consequence of increased competition in the real-estate market, facilitated by changes in stamp duty and an unprecedented supply of properties.
- In the face of this competitive market, sellers need to invest in personal-finance advice to set competitive prices and attract potential buyers. Agents have been emphasizing the importance of this for securing successful sales.
- For the first-time buyers who are hesitant about entering the property market due to high asking prices, finance experts suggest taking advantage of lower mortgage rates, which can make buying more financially viable than renting in specific regions, as well as exploring areas with more affordable home prices.
