Sharp drop in asking prices for UK homes in August

Rightmove survey also found number of home sales was down 15 per cent compared with 2019

Average asking prices for homes were 2 per cent below their level in May but 19 per cent higher than in August 2019, Rightmove said. PA

Rising mortgage costs are believed to be responsible for home asking prices in Britain falling sharply this month, as sellers lower their expectations, an industry survey showed on Monday.

Average asking prices for homes dropped by 1.9 per cent, the biggest monthly fall for August since 2018 and twice as steep as the usual summer fall, website Rightmove said.

Although Britain's housing market boomed during the Covid-19 pandemic, it has weakened due to a run of interest rate rises by the Bank of England.

Despite two-year mortgage rates recently dropping from July's 15-year highs, mortgage lenders Nationwide and Halifax reported falls in selling prices last month.

Rightmove's survey also showed the number of home sales was down 15 per cent compared with 2019, before the pandemic.

Sales of homes typically sought by first-time buyers fell by a less severe 10 per cent, reflecting a 12 per cent increase in rents for properties in that category over the past year, Rightmove said.

Homes on the market as a whole were down by 10 per cent compared with August 2019.

Average asking prices for homes were 2 per cent below their peak in May but, reflecting the surge in demand during the pandemic, remained 19 per cent higher than in August 2019, Rightmove said.