Political uncertainty adds to the many distractions for summer buyers
- The average asking price of newly-listed homes for sale drops by 1.0% (-£3,832) this month to £372,359, substantially larger than the average July drop over the last ten years of 0.2%, as new sellers try to tempt summer buyers who are facing many distractions:
- Number of available homes for sale is 1% below this time last year, but still very close to a 12-year high for the time of year
- The World Cup and unusually hot summer have added to the traditional summer holiday season to distract home-movers
- Market activity levels remain below this time last year, with this year’s mortgage rate increases as a result of the unexpected war in Iran contributing to challenging conditions in the first half of the year:
- The number of sales agreed in the first half of the year was 6% lower than the same period in 2025, however it was level with the first half of 2024, indicating that many buyers are still being tempted if the property and price meet their housing needs
- A competitive initial asking price is critical to a successful sale, rather than relying on a later price reduction. Rightmove analysis of all homes sold so far in 2026 shows that nearly three-quarters sold without needing price reduction
- 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
- Political change is adding further uncertainty to the market and adding to summer buyer distractions. The new Prime Minister has a chance to press the reset button on priorities, and Rightmove is urging that housing should be high on the list
Sellers compete harder to find buyers as prices fall in July
The average asking price of a newly-listed home coming to the market for sale falls by 1.0% (-£3,832) this month to £372,359. While a price drop in July is normal, this month’s fall is much larger than the ten-year average July fall of 0.2%. Sellers are having to compete harder to attract distracted summer buyers in the current market, where supply is very high. Although the number of available homes for sale is 1% below this time last year, it is still very close to a 12-year high for the time of year. Home-movers are always distracted by the summer holiday season, but this year the World Cup and the unusually hot summer have also contributed to lower activity levels. Rightmove analysis shows that the first heatwave in May caused a temporary 8% drop in buyer demand before rebounding, while June’s heatwave caused a similar temporary decline of 6%, followed by a 4% dip during the current July heatwave.
“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 which have been keeping the minds of some potential buyers occupied, namely the World Cup and the hot weather. While these diversions are short-term, they’re adding to what is already a distracting summer holiday period to create a challenging selling environment.” Colleen Babcock, property expert at Rightmove
Despite market challenges and lower activity, economic fundamentals remain sound
After six months of 2026, it’s fair to say that the year has presented its share of challenges for home-movers and the housing market. After an encouragingly active start, the unexpected war in Iran introduced fresh uncertainty into the market and pushed already elevated mortgage rates higher still. The number of sales agreed in the first half of the year was 6% lower than the same period last year. However, it’s important context to note that across the same period, sales agreed remained level with 2024, indicating that many buyers are still being tempted if the property and price meet their housing needs.
Highlighting how price-sensitive buyers are in the current market, new Rightmove analysis shows the importance of getting the asking price right from the outset. Nearly three-quarters (74%) of homes that have successfully sold and completed this year did so without an asking price reduction. Homes that do require an asking price reduction spend an average of 127 days on the market, compared with just 36 days for those that sell without a reduction. These findings underline how the most successful sellers are standing out against the competition by coming to market at a compelling price from day one, rather than risking the need to reduce the asking price later by testing at an over-optimistic price.
The average two-year fixed mortgage rate now stands at 4.92%, up from 4.25% in February before the war in Iran began. However, this is also a small drop from 5.07% last month. Indeed, many of the fundamentals supporting the housing market remain positive. Lenders are competing strongly to lend, wages continue to rise faster than house prices which is helping buyer affordability, and unemployment remains low. These factors leave room for optimism in the second half of the year, particularly if mortgage rates see any falls, and average wage growth continues to outpace house prices.
Incoming Prime Minister adds to uncertainty in distracted market, but a chance to press reset
Political change has added another layer of uncertainty to the market, at a time when buyers are already distracted. A new Prime Minister presents an opportunity to reset priorities, and Rightmove is urging that housing should be high on the agenda. Urgent areas of focus should include reforming stamp duty to improve market mobility and affordability, and supporting the housebuilding industry in getting closer to its 1.5 million homes target. Rightmove’s data shows that the number of new developments coming to market is at its lowest level since January 2017. What would be most unhelpful for the market is long periods of uncertainty caused by policy rumours and speculation. There have already been rumours about a potential Land Value Tax replacing stamp duty and council tax – if rumours are allowed to swirl, with no clear details or deadlines, some potential home-movers may hesitate for fear of missing out.
“The first half of 2026 has been more challenging than many predicted, with the unexpected war in Iran contributing to higher mortgage rates and greater uncertainty for buyers. While activity remains below last year’s levels, it’s encouraging that the number of sales being agreed in the first half of the year is in line with 2024. Pricing remains critical, and it’s remarkable that nearly three-quarters of homes that have sold so far this year have done so without needing an asking price reduction. 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.” Colleen Babcock, property expert at Rightmove
Experts’ views
Matt Smith, Rightmove’s mortgage expert, says:
“Mortgage rates are higher than many buyers would have hoped for at the start of the year, and the increases due to the war in Iran have understandably dented confidence for some. However, lenders remain keen to lend, and the mortgage market is still competitive. There is still uncertainty in the market, and recent mortgage cuts could stop in the near future, however we’re not seeing the kind of difficult lending conditions that have caused more challenging markets in the past. If the outlook shifted and we saw reductions in mortgage rates, it would be a welcome boost to confidence and affordability.”
Chris Thomas, Managing Director at Wiglesworth & Co. Estate Agents in Leamington Spa, Warwickshire, says:
“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. In the type of market we’re in currently, there are some clear rules that sellers need to follow to successfully find a buyer. Firstly, accuracy of pricing is everything and getting the price right the first time gives sellers the best chance. Secondly, sellers need to choose an agent who knows the local area and market extremely well and has a proven strong track record of giving honest and professional advice. There are still buyers active in the market and positive signs that mortgage rates could be easing. If sellers stick to these principles, they have a good chance of being successful.”
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