Housing market troubles grow as Rightmove asking prices take biggest hit for 20 years

Sellers are slashing prices and buyers are gaining the upper hand, but will falling interest rates and new reforms reverse the trend? Here’s what’s really going on in the property market.

Home sellers are cutting their asking prices by the largest amount in 20 years as property market issues expand, according to property listing site Rightmove.

Average asking prices – which reflects the price sellers list their homes for on the site – fell 1.2% between June and July 2025. This is around £4,531 on average.

Rightmove says a summer lull is typical but this is the largest fall it has seen in 20 years.

 The firm says that buyers now have a “decade-high” choice of properties available to buy. But this is little comfort for sellers, particularly those who wish to cash in and downsize around retirement.

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What’s wrong with the property market?

Homeowners have become accustomed to watching their home values increase steadily over years, but since the increase in interest rates by the Bank of England, this has been by no means straightforward.

The market has been dampened by higher mortgage costs which have hampered first-time buyers from getting on the ladder, while the Government’s recent stamp duty hikes have also affected transactions.

London in particular is now showing signs of significant strain in its property market. This is often seen as a signal of wider national malaise and further price drops.

Although price falls are happening, transactions are still increasing. This indicates that while people are still able to buy new homes, those homes for sale are having to be priced more keenly in order to sell. The number of sales is up 5% year-on-year.

Property outlook

The market is currently experiencing adjustments, but with interest rates likely to fall further this year there is hope that the worst effects could soon pass.

With improved affordability and constrained overall supply it is likely that prices will rebound in time.

The Financial Conduct Authority (FCA) has recently announced a raft of mortgage market reforms that are set to increase affordability and ease lending criteria. This will allow more buyers onto the market, balancing current supply and demand.

The Government is also set to make permanent the 95% mortgage guarantee scheme, which allows banks to offer mortgages to buyers with smaller deposits.

Estate agent Savills has predicted that the market overall will see a 25% rise in prices by 2029 thanks to such measures.

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