UK House Prices Dip Further: Rightmove Index Falls to -1% in July

The Rightmove House Price Index for the United Kingdom recorded a month-on-month decline of 1% in July, deepening from the previous month’s revised reading of -0.6%. This marks the second consecutive monthly drop, signaling a continued cooling in the UK housing market as higher borrowing costs and economic uncertainty weigh on buyer demand.

What the Data Shows

Rightmove’s index, which tracks asking prices for properties listed on its platform, fell to -1% month-on-month in July. The decline follows a -0.6% reading in June, indicating an acceleration in price reductions. On an annual basis, the index remains positive, but the monthly trend points to increasing downward pressure. The data reflects asking prices rather than final sale prices, so it serves as a leading indicator of market sentiment.

Why Prices Are Falling

The primary driver of the slowdown is the sustained increase in mortgage rates. The Bank of England’s base rate has remained elevated, pushing average two-year fixed mortgage rates above 5.5% for much of 2025. This has reduced affordability for many buyers, particularly first-time homeowners. Additionally, the cost-of-living crisis continues to limit disposable income, while sellers are increasingly adjusting expectations to attract offers.

Impact on Buyers and Sellers

For buyers, the decline in asking prices may present opportunities, especially in regions where price drops are steeper. However, higher mortgage costs mean monthly repayments remain high, offsetting some of the benefits. Sellers, particularly those who listed earlier in the year at higher prices, are now facing longer selling times and may need to reduce expectations. Estate agents report an increase in price reductions and a rise in the average time properties spend on the market.

Regional Variations

The national average masks significant regional differences. Southern England, especially London and the South East, has seen the largest monthly declines, while parts of the North and Scotland have shown more resilience. This divergence reflects varying levels of affordability pressure and local economic conditions. Rightmove’s data suggests that the most expensive property sectors are experiencing the sharpest corrections.

Conclusion

The July Rightmove House Price Index reading of -1% MoM confirms that the UK housing market is in a clear slowdown phase. While not a crash, the trend suggests further price adjustments are likely in the coming months if mortgage rates remain high. Buyers may find improved negotiating power, while sellers should be prepared for a more cautious market. The data underscores the broader economic challenges facing the UK property sector as it adjusts to a higher interest rate environment.

FAQs

Q1: What does the Rightmove House Price Index measure?
The index tracks the average asking price of properties listed on Rightmove, the UK’s largest property portal. It provides a monthly snapshot of seller expectations and market sentiment, though it does not reflect final sale prices.

Q2: Is a -1% monthly decline a sign of a housing market crash?
No. A -1% month-on-month decline is a moderate correction, not a crash. It indicates a cooling market where sellers are reducing prices to attract buyers, but it does not signal a sharp or sudden collapse in property values.

Q3: How does the July reading compare to historical trends?
Monthly declines of around 1% are not unusual during periods of economic uncertainty or rising interest rates. The current reading is consistent with the slowdown observed in late 2023 and early 2024, though the duration and depth of the trend will depend on future interest rate decisions and broader economic conditions.