House prices in August experience their sharpest decline in five years

House prices have experienced their steepest decline for the month of August since 2018, as sellers attempt to generate interest amidst the pressure of rising living costs and soaring interest rates.

According to property website Rightmove, average asking prices fell by 1.9% compared to July.

This resulted in the typical house being listed at £364,895, down from £371,907 the previous month. Prices also decreased by 0.1% compared to the same month last year, marking the first year-on-year drop in asking prices since 2019.

Rightmove stated that the number of sales being agreed is currently 15% lower than the pre-pandemic levels of 2019, as higher mortgage rates have forced some individuals to put their moving plans on hold.

This latest decline further highlights the impact of inflation on household incomes and the hike in interest rates to their highest level since 2008 on the housing market.

Squeeze: A dip in asking prices is not unusual during August as sellers seek to drum up interest during a quiet period for the market

A decrease in asking prices during August is not uncommon, as sellers aim to attract interest in a traditionally slower market period.

However, the latest decline is twice the typical 0.9% decrease. Rightmove mentioned that average asking prices are now £8,000 (2%) lower than their peak in May.

Despite this decrease, prices have experienced strong growth over the past few years, with a 19% increase (£59,000) compared to August 2019.

Rightmove also highlighted that some sellers are actively responding to their agents’ advice to competitively price their properties based on current local market conditions.