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The average asking price for a home in Great Britain dropped by 1.2% in July – the equivalent of £4,531 – bringing the average price to £373,709. While a seasonal dip in summer is normal, this is the biggest July drop in more than two decades of house price records, according to property website Rightmove.
One of the key reasons for the price drop is the sheer volume of homes currently up for sale. With more choices available than buyers have seen in over a decade, sellers are having to be increasingly competitive with their pricing to stand out.
A spokesman for Rightmove said: “The biggest price drops have come from London, which has seen a 1.5% monthly fall, led by Inner London at -2.1%. April’s increase in residential Stamp Duty in England has had a greater impact in the capital, where property prices are higher, while last year’s increase in stamp duty for investment and second homes is also having an effect.”
Here, we look at what the property market currently looks like for both buyers and sellers, and what’s happening to mortgages.
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Want to speak to a mortgage adviser? Speaking to an experienced adviser can help you to understand your options and get a great deal on your mortgage.
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Tough market for sellers
Many sellers are reducing their property asking prices in the hope of securing a buyer. These reductions, combined with stabilising mortgage rates, are making it increasingly affordable to buy a property, with the biggest barrier for buyers often being having to sell their current home to fund their purchase.
Separate analysis from Zoopla shows that currently the average time to sell a property is 45 days, although more than one in five (22%) homes have been on the market for over six months without selling.
Richard Donnell, executive director at Zoopla, said: “Buyers remain price-sensitive, especially in higher-value markets where the number of homes for sale has grown the most in the last year, boosting choice for home buyers. Serious sellers need to be realistic about where they set their asking price in order to achieve a sale and secure a home move in 2025.
“The market remains on track for 5% more sales in 2025 but house price inflation will remain between 1% and 2%.”
What is happening to mortgage rates?
Even though they remain higher than they were a couple of years ago, mortgage rates are finally starting to ease. According to the latest Moneyfacts UK Mortgage Trends Treasury Report, average mortgage rates on the overall two- and five-year fixed rates fell by 0.03% and 0.01% to 5.09% and 5.08%, respectively in July 2025.
Average two- and five-year fixed rates were last lower than this in September 2022 and October 2024 at 4.24% and 5.07% respectively.
It’s worth noting however, that best buy rates are much lower than these average rates, although the best deals are typically reserved for those with substantial deposits to put down, or who have a significant amount of equity in their homes if remortgaging.
For example, two-year and five-year best buy fixed rates currently start from around 3.76% and 3.9% respectively, provided you want to borrow no more than 60% of the property value.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “There are expectations for fixed rate cuts to heat up this summer across the spectrum, fuelled by swap rate volatility. The mortgage market has shown how far it has improved over recent years, as borrowers who locked into a two-year fixed rate deal back in July 2023 would have been paying 6.41% in interest on average, compared to 5.09% now. That is a difference of £199 per month in repayments on a £250,000 mortgage over 25 years.”
So is now a good time to buy?
Market conditions are certainly more favourable for buyers now than they’ve been for a while, although in many cases a purchase will be dependent on the sale of another property. If you don’t need to sell, perhaps because you are buying a second property or a buy-to-let property, or because you’re currently renting, then you may find it easier to proceed with a purchase relatively swiftly.
It’s important to remember however, that you’ll need to do your sums carefully to work out how much you can afford to spend on your monthly mortgage payments.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “A major problem is that homes have become so expensive that it’s pushing affordability to the limit. And while mortgage rates have fallen, they’re not dropping particularly fast and remain much higher than we have been used to in the previous few years. It’s one reason why property sales are stronger in parts of the country where prices tend to be lower.
“Lenders have reacted to higher house prices by offering more flexibility over how much people can borrow. However, if you’re considering stretching your finances to buy a new home, at a time when prices are so sluggish, it’s vital not to push yourself to the brink and end up being forced to sell at a time when prices may not have risen enough to cover your costs.”
You also need to think carefully about what type of mortgage you want. For example, you may need budgeting certainty, in which case a fixed rate mortgage may be the best option for you, or if you think interest rates are likely to fall further imminently, you may prefer to opt for a variable rate mortgage. You can find out more about comparing mortgages in our guide What’s the best way to compare mortgages?
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Want to speak to a mortgage adviser? Speaking to an experienced adviser can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 2,600 reviews.
Remember that buying a property is likely to be the biggest financial commitment you’ll ever make, so it’s important not to make any rushed decisions. For tips on how to protect yourself during the home-buying process, read our article 15 Common mistakes homebuyers make (and how to avoid them).
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