Rightmove reports record fall in July UK property prices

UK asking prices for newly advertised homes recorded their largest July decline in over two decades, falling 1.2% month-over-month, as sellers compete amid a decade-high level of available properties, according to Rightmove. This significant cooling, corroborated by Nationwide's 0.8% June price drop, prompted Rightmove to halve its 2025 price growth forecast from 4% to 2%. Despite improving affordability driven by strong wage growth and declining mortgage rates, the market faces increased supply-side pressure, signaling a more subdued outlook for property valuations.

Analysis

The UK housing market is exhibiting clear signs of a significant slowdown, headlined by the largest July drop in asking prices (-1.2% month-over-month) in over two decades, as reported by Rightmove. This deceleration is primarily driven by a decade-high level of available housing stock, which is compelling sellers to price more competitively and has flattened year-over-year asking price growth to just 0.1%. This cooling trend is corroborated by data from Nationwide, which recorded a 0.8% price decline in June, and official statistics showing annual price growth slowing from 7.0% in March to 3.9% in May. Consequently, Rightmove has halved its full-year 2025 price growth forecast from 4% to a more modest 2%. Despite this softening, there are supportive underlying factors; affordability is improving due to a combination of strong wage growth (5.0% YoY) and a meaningful decline in two-year fixed mortgage rates to 4.53%. This may cushion demand, but the overall outlook for property valuations has demonstrably weakened, which could impact the operational environment for property-related companies like Rightmove (RTMVY).

Key Decisions for Investors

• Investors with exposure to the UK housing sector, including homebuilders and estate agents, should reconsider their outlook given the significant slowdown in asking prices and Rightmove's halved price growth forecast for 2025.
• For Rightmove (RTMVY), while a high-supply environment may support transaction volumes, the overall market weakness and slashed growth forecasts suggest potential headwinds, warranting a cautious stance on the stock's near-term performance.
• Monitor the interplay between housing supply levels and affordability metrics, as the combination of strong wage growth and lower mortgage rates could provide a floor for prices and signal a potential market stabilization.