The average asking price of a newly listed home fell 1% in July to £372,359, the biggest July decline in a decade, according to Rightmove's latest house price index (HPI).

This is substantially larger than the average July drop over the last ten years of 0.2%, as sellers competed harder for buyers distracted by political uncertainty, the summer holiday season, the World Cup and unusually hot weather.

Colleen Babcock, property expert at Rightmove, said: "This month's larger-than-normal price fall reflects the reality of a market where buyers have plenty of choice and sellers are having to work harder to stand out and attract them. They’re also competing with an unusual number of distractions."

Asking prices were down 0.4% year-on-year, while the number of homes for sale remained close to a 12-year high despite being 1% lower than a year earlier.

Rightmove said housing market activity remained subdued after mortgage rates rose following the war in Iran, with the number of sales agreed in the first half of 2026 falling 6% compared with the same period last year, though matching levels seen in the first half of 2024.

The property portal said pricing remained critical, with 74% of homes sold this year completing without an asking price reduction, while homes requiring a price cut took an average of 127 days to sell compared with 36 days for those priced correctly from the outset.

This shows that many of the fundamentals underpinning the market "remain sound", with lenders competing strongly to lend, wages still rising faster than house prices which is helping affordability, and unemployment remaining low.

Babcock added: "A new Prime Minister also presents an opportunity to make housing a renewed priority, with action needed to support affordability, mobility and the delivery of more homes."

Commenting on the figures, Chris Thomas, managing director at Wiglesworth & Co. Estate Agents, said: "The market is certainly more challenging than at this time last year. However, in saying that, given the increases to mortgage rates we’ve seen in the first half of this year due to the war in Iran, I think the market has actually held up better than many expected."

Nathan Emerson, CEO of Propertymark, commented: “While the year initially started with optimism in the housing market, global unease has in many ways dominated the agenda ever since. In recent months, we have witnessed mortgage borrowing dip significantly, alongside a lower volume of new mortgage approvals. All eyes will be firmly focused on the Bank of England at the end of the month as it makes its next decision on the base rate.”

Jennifer Lawler, sales director at Elite Realty Invest, added: "The market is rewarding realistic pricing and exposing unrealistic expectations. That gap is a clear reflection of how price-sensitive buyers have become, and it's creating a more favourable buying environment for investors.

"Ultimately, this is a market where buying well matters more than trying to time the market. Investors will also be watching closely to see whether Andy Burnham’s new government can bring forward meaningful progress on housing supply, planning reform and affordability."

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