August price fall wipes out top earner’s monthly pay
Sellers have knocked £7,360 off the average asking price, roughly a month's take-home pay for someone earning £145,000 a year.
Home sellers have cut £7,360 off the average asking price this month, the equivalent of a month’s take-home pay on a £145,000 salary.
The 2% drop takes the average newly listed home to £364,999, according to Rightmove.
It is the steepest August fall since 2018 and well above the ten-year average for the month of 1.3%.
Asking prices currently stand at 1% below where they were a year ago, the largest annual fall since December 2023.
The equivalent take-home pay figure is based on someone earning around £145,000 once income tax and National Insurance are deducted.
The unwelcome news will be a huge blow to vendors, but Rightmove insists that those who price realistically give themselves the best chance of finding a buyer and completing a move.
Industry reaction
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Although asking prices are not selling prices but often reflect owners’, or agents’, aspirational starting points, these figures help demonstrate how difficult it has become to attract genuine buyers.
“Confidence has not been helped by continuing worries about the direction of travel for interest rates and inflation, while speculation about possible tax changes in the Budget is inevitably weighing on decision-making in a price-sensitive market.
“The change in occupier at Number 10 Downing Street has prompted some re-awakening of demand but not enough so far to reduce in sufficient numbers the amount of stock overhanging the market, particularly flats. As a result, successful sellers need to go further than just set ‘fairly reasonable’ asking prices or make ‘token’ reductions as part of negotiations if they are serious about generating offers and achieving sales.”
Tomer Aboody, director of specialist lender MT Finance, says: “With a further change in Prime Minister, along with the prospect of more taxation on the way, the property market is reacting negatively with buyers and sellers reluctant to make a move.
“As other opposition parties propose to cut stamp duty and some are even mooting the prospect of getting rid of it altogether, will the Government respond by looking to do the same in order to get the market moving? It would definitely be a step in the right direction.”
Ian Harris, NAEA Propertymark President, says: “Taking a wide-angle view of the property market across the year to date, it comes as little surprise that there has been a dip in overall house prices.
“We have seen global unrest influence household spending, the warm weather potentially impacting viewings, as well as raised concerns around longer-term affordability in areas such as energy prices.House price falls this month have wiped out a top £145k earner’s monthly pay.”
Tom Bill, head of UK residential research at Knight Frank, says: “Rising mortgage rates and uncertainty around tax rises in the Budget are curbing demand, which is being felt more acutely in parts of the country where affordability is already stretched.
“The unpredictable events in the Middle East mean there is nothing to suggest mortgage rates will drop materially in the short term, which should continue to keep a lid on prices this year.
“Meanwhile, the Government is likely to fund its spending commitments by increasing taxes on wealth and assets, which means the new high-value council tax bands introduced in November’s Budget increasingly look like introductory rates. As a result of these pressures, we recently revised down our 2026 forecast for UK house price growth to 1.5%.”
