posted 18th August 2026
Largest August price drop since 2018 despite mini bounce in buyer demand
The average asking price of a newly-listed property dropped by 2.0% (-£7,360) this month to £364,999, according to Rightmove data. This is a much larger drop than we’d usually see in August.
Summer sellers are cutting prices due to the quieter holiday period, and there are also more homes for sale in August than we’ve seen at this time of year since 2014. Rightmove data also shows that average house prices are now 1.0% lower than a year ago, the largest annual price drop we’ve seen since December 2023.
However, this average figure for the whole of Great Britain doesn’t reflect what’s going on at a regional level. House price growth for northern and southern regions of England are very different, with prices in the north of England up by 1.5% compared with a year ago. Scotland is also performing well, with 1.1% price growth year-on-year.
Meanwhile, prices in the south of England are down by 1.8% and by 3.1% in London, which saw the largest drop of any region in August. The capital has the largest choice of homes available to buy since 2010, so sellers are having to compete hard on price to try to tempt buyers.
The Burnham effect?
Since Andy Burnham became Prime Minister on July 20th, Rightmove data shows that buyer demand has increased by 5%.
Burnham’s announcement that he won’t be changing property tax in October’s Budget should help to give buyers more certainty into the autumn. However, it’s too early to say whether this could generate any lasting changes in the housing market.
Rightmove has revised its 2026 national average asking price forecast to between 0% and -2%. This reflects mortgage-rate movements, wider economic uncertainty and the potential impact of the forthcoming Budget.
(Forecasts are subject to change and should not be relied upon as a guarantee of future market performance)
What are mortgage rates doing?
Rightmove’s daily mortgage tracker shows that the average two-year fixed mortgage rate is 5.09%, up from 4.95% last month, as uncertainty continues in the Middle East.
Some market indicators suggest rates could move lower if conditions improve, but this is uncertain and will depend on lender pricing, rates and wider economic factors.
Matt Smith, our mortgages expert, explains:
“Confidence has taken a bit of a hit as fixed-rates remain elevated and return above the psychologically important 5% mark. However, the mortgage market remains highly competitive, with lenders still keen to attract business and support borrowers.
“Many lenders have built greater resilience into their pricing, meaning they are generally better prepared to absorb shorter-term market shocks, which gives movers more stability even during periods of uncertainty.”
