
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 rosier, but right now, the smart money's negotiating hard and getting what it wants.' Many lenders have recently made changes to their criteria, allowing some borrowers to potentially take out bigger loans. Rightmove's mortgage tracker indicates that the average two-year fixed mortgage rate is now 4.53 per cent, compared with 5.34 per cent a year earlier.
Colleen Babcock, a property expert at Rightmove, said: 'We're seeing an interesting dynamic between pricing and activity levels right now. 'The healthy and improving level of property sales being agreed shows us that there are motivated buyers out there who are willing to finalise a deal for the right property. 'What's most important to remember in this market is that the price is key to selling. 'The decade-high level of buyer choice means that discerning buyers can quickly spot when a home looks overpriced compared to the many others that may be available in their area.
'It appears that more new sellers are conscious of this and are responding to this high-supply market with stand-out pricing to entice buyers and get their home sold.' Ms Babcock added: 'Crucially, buyer affordability is heading in the right direction, and another two (Bank of England base rate) cuts before 2026 would be a big boost to this.' Phillip Bishop, managing director at Perry Bishop in Cirencester, Gloucestershire, said: 'We're seeing significantly higher stock levels than a year ago but mitigated in part by a good increase in buyer registrations and viewing levels compared with last year. 'Buyers are taking their time and viewing more before deciding, and the serious and motivated sellers are pricing sensibly and getting success.'
He added: 'Rarely available properties are still receiving mass interest and multiple offers. 'The Cotswolds summer market can slow over the holidays, but we expect a second wave of serious buyer activity in the autumn, with serious motivated buyers wanting to agree their purchase.' Rightmove's report was released as property firm Hamptons downgraded its 2025 rental growth forecast from 4.5 per cent to 1.0 per cent across Britain. It said this reflected a faster-than-expected market slowdown. It said the primary driver behind this cooling rental market has been the transfer of demand from the rental sector to the sales market.
As mortgage rates have fallen, homeownership has become more accessible, leading to strong first-time buyer activity, Hamptons said. Hamptons said that rents on newly let properties rose by 0.4 per cent year-on-year across Britain in June, reaching £1,369 per month - the weakest growth since August 2020. Aneisha Beveridge, head of research at Hamptons, said: 'The rental market has softened more quickly than we anticipated towards the end of last year. 'What initially appeared to be a London-centric slowdown has now spread across the country, with rents declining in multiple regions and growth easing elsewhere. 'A combination of falling mortgage rates and a weaker labour market has shifted the dynamics - more affluent renters are becoming first-time buyers , while the economic slowdown is limiting what others can afford.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


The Guardian
17 minutes ago
- The Guardian
Zero-hours contracts: peers accused of ‘trying to block stronger UK workers' rights'
Conservative and Liberal Democrat peers have been accused of trying to block stronger rights for millions of workers amid a growing campaign by business leaders to water down Labour's zero-hours contract plans. In a blow for the government, the Lords last week voted to curtail the manifesto promise to give workers a right to a guaranteed hours contract and day-one protections against unfair dismissal. Setting up a showdown with the upper chamber, the Lords passed a series of amendments to the employment rights bill that will must be addressed by ministers when MPs return from their summer break. In an angry intervention on Monday, the general secretary of the Trades Union Congress, Paul Nowak, said the Lords was 'doing the bidding of bad bosses' and ought to 'get out of the way' of the plans. 'The sight of hereditary peers voting to block stronger workers' rights belongs in another century. It's plain wrong,' he said. Under the Lords' amendments, a requirement for employers to offer zero-hours workers a contract covering a guaranteed number of hours would be shifted to place the onus on staff to ask for such an arrangement. Protections against unfair dismissal from the first day of employment – which the government plans to reduce from the current level of two years – would be extended to six months, and changes to free up trade unions would be curtailed. The bill will return to the Commons in September for MPs to consider the amendments. The two houses then continue to vote on the changes in a process known as 'ping-pong' until a way forward is agreed. The amendments were put forward by the Lib Dem Lord Goddard, a former leader of Stockport council, and two Tory peers: Lord Hunt, who is a shadow business minister, and Lord Sharpe, a former investment banker. Hunt did not respond to a request for comment. Sharpe said: 'Keir Starmer's unemployment bill is a disaster for employees as much as it is a threat to business. Labour politicians who have never worked in business are destroying the economy. Only the Conservatives are listening to business and making the case for growth.' Goddard said he feared Labour's 'rushed bill' would be bad for workers in small businesses and on family-owned farms. 'They were badly let down by the Conservatives, and Labour seems to have a blind spot when it comes to farms and small businesses, too. 'We support the bill as a whole and have worked constructively to try to improve it. It's a shame to see the government getting upset that we didn't simply give them a blank cheque.' Employers groups welcomed the changes, saying the Lords was responding to business concerns. Helen Dickinson, the chief executive of the British Retail Consortium, said: 'Putting forward positive, practical and pragmatic amendments to the employment rights bill [will] help to protect the availability of valuable, local, part-time and entry level jobs up and down the country.' Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Industry chiefs have stepped up lobbying against the workers' rights changes, warning that companies were already slashing jobs and putting up prices in response to tax rises in chancellor Rachel Reeves's autumn budget. Dickinson said there was 'further to go' to curb the employment rights bill. 'Even with these amendments accepted, retailers remain worried about the consequences for jobs from other areas of the bill.' Union leaders have, though, urged ministers to stand firm. A recent mega poll of 21,000 people commissioned by the TUC found a majority of UK voters – including Conservative, Lib Dem and Reform UK supporters – backed a ban on zero-hours contracts. Nowak said the government plan included 'commonsense protections' that a majority of people wanted to see become law. 'These peers are not just out of touch, they are actively defying their own voters – and the public at large. The government must stand firm in the face of cynical attacks and deliver the employment rights bill in full.'


Times
42 minutes ago
- Times
Financial Ombudsman Service boss paid £230,000 after ousting
The ousted head of the Financial Ombudsman Service received a pay-off of almost £230,000, it has been disclosed in the annual report. Abby Thomas, who left abruptly on 6 February, was paid £229,869 in severance payments on top of her normal salary. The payoff included £100,000 for loss of office, £107,692 in lieu of notice and £22,177 for a period of gardening leave that began on the day she left, the FOS said. MPs on the Treasury select committee have hit out at the manner of her departure and criticised the FOS chairwoman Baroness Manzoor for refusing to answer questions on why Thomas left and whether she was forced out. The FOS, which rules on complaints by consumers about financial services firms and can set compensation orders, is under pressure to reform. Rachel Reeves has pledged to curb its powers so it no longer acts like a regulator after complaints from the industry that it has increased the cost of 'mass redress events'. It has been dealing with a significant rise in claims, mainly related to car finance loans, but also because of concerns about other consumer loans and more people complaining about banks' handling of frauds. Dame Meg Hillier, chairwoman of the Treasury committee, said this month: 'The handling of this situation by the senior leadership has been deeply disappointing.' Thomas, a former Virgin Media executive, served for less than three years. She has been replaced by James Dipple-Johnstone as chief ombudsman and Jenny Simmonds as interim chief executive. Manzoor is due to retire on August 1. The FOS received 450,000 new inquiries in the year to March, up from 330,000. The motor finance industry is braced for a judgment from the Supreme Court this Friday that could determine the scale of compensation payments for failing to disclose commissions paid to dealers.


Times
an hour ago
- Times
Activist investor steps up pressure on Smith & Nephew
The activist investor Cevian Capital has raised its shareholding in Smith & Nephew, increasing pressure on the FTSE 100 medical equipment maker before its half-year results. Filings show Cevian, one of Europe's biggest activist investors, has raised its stake to 8.5 per cent having first publicly emerged with a holding in July last year via a Jersey-based vehicle. Cevian, which had raised it to 7.5 per cent in February, is understood to be the largest shareholder. The stake building comes before half-year results from Smith & Nephew on August 5 where investors will look for signs of a turnaround in the performance of its orthopaedics division, the group's largest. The group remains committed to retaining the business, but following full-year results in February, John Rogers, Smith & Nephew's chief financial officer, outlined scenarios under which it could evaluate options.