UK home prices fall 1.3% in August as buyers gain upper hand in high-supply market

The average price of a home in the UK has dropped by nearly £11,000 over the past three months, as buyers gain increasing leverage in a shifting market [1]. According to Rightmove, the average asking price fell by 1.3% in August to £368,740, continuing a trend that began in June and July [1]. The cumulative decline marks the sharpest three-month downturn in years, signaling a broader correction in the housing market.

The drop in prices reflects a growing imbalance between supply and demand, with more properties on the market competing for fewer buyers [1]. Over a third of properties listed for sale have had their prices reduced, highlighting the pressure on sellers to price competitively. Rightmove’s data shows that homes priced at a realistic level tend to sell faster and closer to the asking price. In contrast, properties that require price cuts often remain on the market for nearly three months, underscoring the importance of initial pricing in a buyer’s market [1].

This shift has created a more favorable environment for buyers, who now have greater choice and more room to negotiate. Housing supply has risen nearly 10% compared to the previous year, the highest level in almost a decade [1]. Combined with a gradual easing of mortgage rates—two-year fixed rates have fallen from 5.17% to about 4.5%—this has improved affordability for some buyers, further fueling demand [1]. Despite the falling prices, July saw the best sales performance in five years, with agreed deals up 8% year-on-year, marking the busiest month since the post-pandemic recovery began in 2020 [1].

However, analysts caution that the market remains sensitive to broader economic conditions. While the Bank of England has cut its base rate three times in 2025, easing borrowing costs, it continues to monitor inflationary pressures that remain embedded across the economy [1]. Rightmove has revised its forecast for 2025, now expecting a modest 2% rise in house prices, down from an earlier projection of 4%, reflecting the combined impact of high supply, cautious buyers, and limited relief in mortgage costs [1].

The current environment has also reshaped seller behavior. With more homes on the market and a shift in buyer expectations, agents increasingly advise sellers to price their homes attractively from the outset [1]. Colleen Babcock of Rightmove emphasized that “buyers have the upper hand in this high-supply market, so a tempting price is vital to agree a sale” [1]. This contrasts with recent years, when sellers often had the luxury of holding out for higher offers due to limited inventory.

While the market has become more balanced, the trend suggests that affordability challenges and economic uncertainty will continue to influence buyer and seller decisions in the near term [1].

Source: [1] UK home prices drop nearly £11K in 3 months as buyers gain upper hand (https://coinmarketcap.com/community/articles/68a280ca8512ac1836bd7163/)