Rightmove now predicts a 0 to -2% fall as geopolitics and Budget worries impact
Rightmove has downgraded its national average 2026 price forecast from +2% to between 0% and -2% and said that a combination of an uncertain geopolitical picture, changing mortgage rates and the new Chancellor’s first budget in October makes further predictions challenging.
The revision follows the largest drop in house prices since 2018 in its latest House Price Index, which shows that average newly-listed asking prices dropped by 2%. The figure is more than the ten-year average of -1.3% and is down by £7,360 this month to £364,999. Meanwhile, annual average prices, which are down 1%, have seen their biggest fall since December 2023.
Regional differences
London has been hit hardest, with an annual price drop of 3.1%, the largest fall recorded in August. The capital also has the largest choice of homes on offer since 2010.
Meanwhile, an average home in London costs around 17 times the national average annual wage and is also 38% more expensive than the second-highest priced region in the South East, said Rightmove.
Elsewhere, prices in the north of England are up by 1.5% versus a year ago, while in the south they are down by 1.8%.
Prices have risen the most in the North West, up by 1.9% annually. Scotland also saw higher average asking prices.
Buyer demand has bounced since Andy Burnham became prime minister, however, bringing hope for a busier autumn. Demand is up 5%, although that’s still 10% lower than last year.
Uncertainty in the Middle East has led to higher mortgage rates, with the average two-year rate up to 5.09% from 4.92% last month.
Colleen Babcock, property expert at Rightmove, said: “National average prices are increasingly masking very different local market conditions.
“The mini-Burnham bounce and some renewed general optimism have brought a degree of improvement to the market as a whole in recent weeks. Whether that develops into a more sustained recovery will likely depend on confidence, mortgage rates and the new Chancellor’s first Budget this Autumn.”
Challenges ahead
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said the figures pose challenges for the industry. “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.
“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.”
