House prices fall for the first time in over a year in the UK housing marke

The UK housing market has recorded its first annual drop in average asking prices since January 2024, with new figures from Rightmove revealing a 0.1 per cent year-on-year decline for properties coming onto the market this September. The current average asking price stands at £370,257, signalling a notable shift in market momentum after more than eighteen months of modest increases or stability.

Increased supply is now the dominant force, as the number of homes listed for sale on Rightmove has reached a ten-year high. Sellers have responded to this surge by pricing more competitively, leading to moderation in overall price growth. Notably, the South of England, where prices are traditionally highest, is seeing the most pronounced effect with a nine per cent rise in the number of homes for sale compared with last year. Regions such as the South West are experiencing a 1.3 per cent fall in annual prices, while the North West remains resilient with a 3.2 per cent increase.

Transactions are also on the rise, with sales agreed up four per cent compared to last summer. However, regional disparities persist. The West Midlands has joined areas experiencing minor drops, whereas the North of England, aside from the Midlands outlier, continues to buck the trend with price gains or stability. These contrasting trends highlight the persistent north–south divide in property values and market activity.

Uncertainty linked to speculation over impending changes to property tax policy has further complicated the landscape. Reports suggest that the government is considering a new national tax for owner-occupiers of houses valued above £500,000, payable upon sale. Such a proposal, if implemented, would disproportionately affect London and the South East, where a significant portion of housing stock exceeds this threshold. In London, nearly 60 per cent of homes could be impacted, compared with only eight per cent in the North East.

Estate agents and analysts are already observing the effects of budget uncertainty. Fewer enquiries and sales, coupled with declining prices particularly in higher-value segments, have been reported in August. Market participants are hesitating amid the lack of clarity, with the autumn budget still more than two months away.

While greater choice is driving sales in some parts of the country, ongoing policy uncertainty and regional variation in supply and demand are likely to significantly influence asking prices and transaction levels for the remainder of the year.