Average asking prices for homes in Britain experienced their largest August decrease since 2018, according to property portal Rightmove. In the affluent Royal Borough of Kensington and Chelsea, often cited as Britain's richest borough, new listing prices fell by nearly £100,000 month-on-month, from £1,648,148 in July to £1,552,970 in August.
Across London, average newly listed asking prices declined by 4.4 percent in August, a drop of approximately £30,000. This decline reflects a broader trend across the country, with the average price of a newly listed home nationally falling by 2 percent, or £7,360, in August to £364,999. This represents a 1 percent decrease compared to a year ago.
Rightmove attributes the market cooling to rising mortgage rates. The number of homes available for sale in London has reached a 16-year high, leading to increased competition among sellers. Nationally, the volume of available homes for sale also hit a 12-year high for this time of year, prompting sellers to adjust their price expectations. Some sellers are reportedly reducing their own onward purchase prices to compensate for lower offers on their current homes.
National Trends and Future Outlook
Beyond London, the North West of England saw a 1.9 percent annual increase in average asking prices, while London experienced a 3.1 percent decrease. Property experts suggest that sellers are increasingly acknowledging market realities and pricing more competitively from the outset. With a wider selection of homes available to buyers than in over a decade, competitive pricing is crucial.
Rightmove has revised its house price forecast for 2026, now predicting between flat growth and a 2 percent drop in average seller asking prices for the full year, down from an earlier forecast of a 2 percent increase. Data from Hamptons indicates that landlord buyers are taking advantage of the slower market to negotiate significant price reductions, with sellers increasingly amenable to lower offers. Leasehold flats, particularly one-bedroom units without outdoor space, are proving difficult to sell.
Broader Economic Factors
The property market is also influenced by wider economic conditions. Mortgage rates have risen due to inflation, linked to geopolitical events, reversing earlier hopes of rate cuts by the Bank of England. This has increased costs for those remortgaging or purchasing new homes.
Additionally, proposed plans for an additional council tax on homes valued over £2 million have drawn criticism from four London councils – Kensington and Chelsea, Richmond, Wandsworth, and Westminster. Leaders from these boroughs have informed Chancellor John Healey that 55 percent of the projected revenue from this levy, set to take effect in April 2028, would come from their areas. A Treasury spokesperson stated the measure aims to address an "unfairness" where some properties face higher council tax than much more expensive homes in prime London locations.