End of Britain’s housing boom? Warning issued for sellers

British homeowners trying to sell their properties are facing a ‘reality check’, experts warned today after the biggest July drop in asking prices for at least two decades. The average price tag on a home coming to market fell to £373,709 this month – marking a £4,531 or 1.2 per cent decrease on June, according to Rightmove. While there is often a seasonal dip in prices in July, this is the largest monthly price drop at this time of year recorded by the firm over more than 20 years of data.

Rightmove has also cut its house price forecast for 2025 from 4 per cent growth to 2 per cent amid concerns over a high level of seller competition limiting price growth, although the company is retaining its prediction of 1.15million transactions this year. London, and particularly inner London, has been a driver of asking price falls among new sellers, according to the firm. Price tags across London have fallen by 1.5 per cent month-on-month, rising to 2.1 per cent average price falls in inner London.

April’s increase in stamp duty has had a particular impact in London where property prices are higher. But property experts believe the market is undergoing a reset rather than collapsing, with over-optimistic sellers now correcting ambitious sale prices. Ranald Mitchell, director at Charwin Mortgages, said: ‘This is not a crash, it’s a reality check. Sellers can no longer name their price and expect the market to play along.’ He added: ‘With stock levels surging and buyers laser-focused on value, overpriced homes are being left to gather dust. The drop in asking prices is proof that wishful thinking is being replaced by market sense.

‘Savvy sellers who price sharply are seeing results. Rightmove’s trimmed forecast makes sense in a market that is adjusting, not collapsing.’ By contrast, the North East of England has seen a 1.2 per cent rise in prices month-on-month, continuing a trend of less expensive areas seeing faster price growth. Summer sellers typically need to work harder to capture distracted buyers’ attention. Justin Moy, managing director of EHF Mortgages, said: ‘This has all the hallmarks of seasonal demand combined with the fall-out from April’s increased stamp duty costs.

‘With mortgage rates holding and lenders digging deeper into their pockets this could just be a summer blip, but the Government needs to keep a close eye on this trend.’ Babek Ismayil, founder at property transaction platform OneDome, added: ‘Sellers are waking up to the fact that, if you put your property on the market at an unrealistic price, it’s simply not going to sell in the current market. ‘And if it doesn’t sell and languishes on portals, that can become a problem and see the achievable price dwindle further. This has been the case for a few years now but there now appears to be a shift, which may get the market moving in earnest finally.’

Among the homes reduced in London is a freehold split-level two-bedroom flat for sale in Richmond which was put on the market in 2024 for the first time in 60 years. The property was first listed last September for £1.4million, before being reduced to £1.35million in November, £1.285million in January and £1.2million in May. In Kent, a three-bedroom semi-detached house in Kemsing was put on the market for £740,000 last October, but cut to £725,000 in February and £695,000 in June.

And buyers in Hampshire could look at a two-bedroom thatched country house in Martin. The New Forest property was listed for £549,000 in March, but has now been cut to £495,000. Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management, said: ‘Increased stock levels are giving sellers a reality check and they’re pricing more realistically. ‘People have come to understand that over-pricing can see you under-achieve when it comes to the sale price agreed. This is not a sign of a property market imploding, just one that is becoming more rooted in reality.’

Tempting pricing from new sellers is said to be helping to improve buyer affordability, enticing new buyers into making inquiries. With mortgage rates falling and two more Bank of England base rate cuts still expected in 2025, Rightmove believes the overall outlook for the second half of the year remains positive. Patricia McGirr, founder of the Repossession Rescue Network, said: ‘Yes, asking prices are sliding, but where I am, it’s a tale of two markets. ‘Family homes with decent space are holding strong. But in the investment world? Buyers are driving hard bargains and sellers are blinking first.

‘Tempting price tags might boost affordability, but they’re also a litmus test: if your property’s not shifting, it’s probably overpriced, overlooked or overhyped. ‘The second half of 2025 may look…