Rightmove: Asking Prices Slip 1.2% as Election and Euros Distract Buyers

Rightmove's latest House Price Index confirms what estate agents up and down the country have been quietly reporting for weeks: average asking prices fell by 1.2% in July, taking the typical seller's asking price to £373,493. The portal attributes the softening to a familiar summer cocktail of distractions - school holidays, the European Championship, and a general election that dominated news cycles and, apparently, kitchen-table conversations that might otherwise have turned to house-hunting. On the surface this looks like a seasonal blip. Beneath it, however, lies a more instructive story about how sensitive the UK's still-fragile housing recovery is to shifts in sentiment, and what that means for anyone with capital deployed in bricks and mortar.

Seasonal dips in July are not unusual - Rightmove's own data typically shows a pullback of between 0.4% and 1% at this point in the calendar as family buyers pause house-hunting for holidays. A 1.2% fall is therefore towards the sharper end of the historical range, suggesting the political backdrop did more than simply coincide with the summer lull. Elections have a well-documented chilling effect on big-ticket decisions: buyers hold off making offers, sellers delay listing until the picture clarifies, and mortgage lenders sometimes widen pricing to reflect short-term uncertainty. With a change of government now confirmed, the question for the autumn market is whether pent-up demand releases quickly, or whether policy uncertainty around stamp duty thresholds, planning reform and the private rented sector keeps buyers cautious into 2025.

Regional divergence remains the defining feature of this cycle. London and the South East, including hotspots such as Surrey, continue to show the most price resistance, with average values in the capital still roughly 15% below their 2022 peak in real terms once inflation is stripped out. By contrast, the Northern Powerhouse cities are proving more resilient. Manchester and Leeds have both recorded modest annual price growth of around 2-3%, supported by strong rental yields and continued corporate relocation activity, while Liverpool remains one of the best-performing markets for gross rental yield, regularly exceeding 7% in postcodes close to the universities and business district. Newcastle and Birmingham sit somewhere in between - both benefiting from infrastructure investment and relative affordability, but still exposed to the same buyer hesitancy that has weighed on national sentiment this summer.

For buy-to-let landlords, the July dip is a mixed signal. Softer asking prices in the short term can present entry opportunities, particularly in northern cities where yields already outperform the London average of roughly 4.5%. But landlords also face a policy environment that remains unsettled - a new government reviewing renters' rights legislation, EPC requirements for rental properties, and potential changes to capital gains tax all sit as live risks on the horizon. Sophisticated investors are likely to use this period of price softness to negotiate harder on acquisitions rather than to retreat from the market altogether, particularly in cities with strong tenant demand and constrained new supply.

First-time buyers, meanwhile, may find the next few months present a genuine, if narrow, window of opportunity. Asking price falls combined with mortgage rates that have begun easing from their 2023 peaks - five-year fixed rates are now commonly available below 4.5% from several major lenders - mean affordability is improving marginally at the margin. However, this window is unlikely to stay open indefinitely. Rightmove's own data shows buyer enquiries typically rebound sharply once the political picture settles and the autumn selling season begins in September, historically the second-busiest month of the year for new listings and agreed sales. Developers and housebuilders will be watching this rebound closely, since forward sales pipelines for major listed housebuilders have been notably thinner through the first half of 2024 than in prior years, with several delaying land acquisitions pending clarity on planning reform.

Commercial property investors, though less directly affected by residential asking price data, should read the wider signal correctly: this is a market waiting for confirmation rather than one in structural decline. Transaction volumes across the residential sector have been running roughly 10-15% below the five-year average for much of 2024, a pattern consistent with buyers deferring decisions rather than abandoning them. That pent-up demand, once released, tends to produce a compressed and competitive autumn market - precisely the conditions in which well-capitalised investors and cash buyers gain the upper hand over mortgage-dependent purchasers.

The verdict for the next six to twelve months is reasonably clear. July's price fall reflects a temporary confluence of distractions rather than a genuine loss of market confidence, and the fundamentals - improving mortgage affordability, chronic undersupply, and resilient regional rental demand - point towards renewed momentum once the political and seasonal noise clears. Investors who treat this summer lull as a buying window, particularly in the North West and Yorkshire, are likely to look prescient by early 2025, while those waiting for further falls in London and the South East may find the correction shallower and shorter-lived than the headlines suggest.