UK House Prices See Worst June Drop Since 2011: Rightmove

UK house prices posted their worst June performance in 14 years as competition to attract buyers remained fierce among sellers, the property website Rightmove said Monday.

The average asking price for a home fell 0.8% in June from May, to £373,894. That is the largest June decline since 2011, Rightmove said. The drop came despite a slight uptick in buyer demand, which rose 2% year-on-year.

Sellers are cutting prices to stand out in a market where supply is running ahead of demand. The number of homes available for sale is 13% higher than a year ago, Rightmove said. That glut gives buyers more choice and forces sellers to compete harder on price.

Mortgage rates remain a headwind. The average five-year fixed-rate mortgage is now 4.82%, down from a peak of 6.11% in July 2023 but still well above the 2-3% range that prevailed before 2022. Higher borrowing costs have squeezed affordability, particularly for first-time buyers.

Rightmove said the market is "price-sensitive" and that sellers who price realistically from the start are more likely to secure a sale quickly. Properties that are priced correctly at launch sell in an average of 55 days, compared with 72 days for those that start too high and are later reduced.

The June data follows a broader cooling in the housing market. UK house prices rose just 0.6% in the year to April, according to the Office for National Statistics, down from 1.8% annual growth in March. The Bank of England's interest rate decisions remain the key variable for the sector. The central bank held its base rate at 5.25% on Thursday, with markets pricing a first cut in August or September.

For now, the market is in a waiting pattern. Lower mortgage rates would likely revive demand and stabilise prices. A delay in rate cuts would keep the pressure on sellers to discount.