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If you’ve been keeping an eye on the housing market lately, you might have spotted some surprising news: asking prices for homes have taken their biggest tumble in 20 years.
According to Rightmove, the average asking price dropped by 1.2% from June to July 2025 – that’s about £4,500 off the average listing price. While summer slowdowns are pretty normal, this is the steepest dip we’ve seen in two decades.
Right now, buyers have the widest choice of properties in 10 years, which sounds like great news if you’re house-hunting. But for sellers – especially those thinking about downsizing for retirement – it can feel a little nerve-racking.
Why Prices Are Dropping
For years, house prices seemed to do nothing but climb. But a few things have been putting the brakes on lately:
● Rising interest rates have pushed up mortgage costs, making it harder for first-time buyers to take the leap.
● Stamp duty increases have made moving more expensive, slowing the market further.
● London’s housing market is feeling the squeeze – and what happens there often ripples across the country.
Interestingly, despite lower asking prices, sales are actually up 5% compared to last year. This suggests that sellers who price their homes more competitively are still getting results.
The Road Ahead
It’s not all bad news. Experts expect interest rates to drop further this year, which could make mortgages more affordable. Plus, the Financial Conduct Authority is bringing in new rules to make borrowing a little easier, and the government’s 95% mortgage guarantee scheme (allowing smaller deposits) is here to stay.
According to estate agents Savills, these changes could help lift property prices by as much as 25% by 2029.
What This Could Mean for You
● If you’re a first-time buyer: Lower prices might open up opportunities, but you’ll still need a healthy deposit and to meet mortgage affordability rules.
● If you’re helping family get on the ladder: Whether it’s your children or grandchildren, think about your own finances first. Gifting or lending a deposit can affect tax and your future plans – so it’s worth speaking to a financial planner. We put together a guide for supporting your children financially, without putting your own financial wellbeing at risk.
● If you’re downsizing: Even if you can get a good sale price, it’s smart to think about how to make the most of that money long-term, factoring in any tax implications.
The Takeaway
We’re in a period of adjustment – and while prices are softer right now, the market could strengthen in the next few years. Whether you’re buying, selling, or helping someone else, the best move is to understand how these changes fit into your bigger financial picture. If you’d like help planning your finances around moving house, feel free to get in touch.