UK Housing Market Slows with 2% Price Drop Amid High Mortgage Rates

The Rightmove House Price Index has fallen by 2% in August, according to its latest report. This sharp decline is more pronounced than the 1% drop recorded in July, indicating that sellers are increasingly adjusting their expectations in response to a slower market.

The data from Rightmove, which covers about 95% of UK homes for sale, reflects new listings and asking prices. However, it serves as an important indicator of market sentiment and trends. The August figure is seasonally influenced, with fewer buyers typically seen during the summer months. Nevertheless, the consecutive monthly falls suggest that the market is cooling more than usual.

High mortgage rates, driven by the Bank of England's base rate, have reduced buyer affordability. The average two-year fixed mortgage rate remains above 5%, making borrowing more expensive. Inflation, while easing, continues to pressure household budgets and limit potential buyers' offers.