A report from online estate agent Rightmove said that lower asking prices, along with increased average earnings and downward trend in mortgage rates are “tentative steps towards improved buyer affordability”.

For first-time buyers, the national average asking price was 0.9% down month-on-month, coming to £223,614.

For second steppers, the change was negative 0.8% month-on-month to £338,137 and for those at the top of the ladder, asking prices recorded a 3.4% fall during the same period to £664,756.

The report said that the average drop in August is typically 0.9%.

“The much larger than usual price drop this month indicates that some sellers are seizing the initiative and heeding their agents’ advice to price competitively for their current local market conditions, in order to attract a buyer against the backdrop of holidays, cost of living pressures, and the highest Bank of England base rate since 2008,” it explained.

Fall in house prices partly due to ‘seasonal drop’

However, Rightmove added that average house price are still 19% higher than pre-pandemic market, which is equal to around £59,000.

The average five-year fixed rate stands at 5.81%, down from 6.08% three weeks ago, with signs that this trend could continue.

The report said that the number of sales being agreed is 15% down on the “normal” figures of 2019, but first-time buyer sales were only 10% down. The latter point is attributed to high rents and scarcity of rental property.

It added that the number of available properties is 10% lower than 2019 figures, and agents reporting that “realistically-priced homes” in popular areas are tempting buyers.

Tim Bannister, Rightmove’s director of property science, said that there were “still significant challenges in saving up enough for a deposit and affording higher mortgage payments” but would-be buyers were now more likely to see greater property choice than during the pandemic.

However, he said that there not a glut of properties for sale as the number of properties was still lower than 2019.

Bannister said that the average time to find a buyer was 55 days compared to 61 days in 2019.

“While a 1.9% drop in just one month seems dramatic, it’s in part an expected seasonal drop as sellers coming to market realise that they have to compromise on price due to the traditionally quieter summer holiday period.

“Agents report that correctly-priced homes in many areas are still attracting multiple prospective buyers competing to secure them, so if buyers see a home that could be for them and they can afford it, they may still need to act fast rather than sitting back,” he added.

Sales agreed remain ‘disappointingly low’

Jeremy Leaf, North London estate agent and a former RICS residential chairman, said that despite a “larger-than-expected drop in aspirational asking prices as opposed to selling prices, in many cases this hasn’t generated an increase in sales agreed, which remain disappointingly low”.

“On the ground, we’re seeing a similar picture. Realistically-priced properties are still selling relatively quickly particularly to ‘cash’ or equity-rich buyers whereas those requiring reductions to attract more attention are sticking.

“Certainly, continuing strong employment and slightly more stable mortgage rates are helping to revive interest despite holiday distractions,” he noted.

Tomer Aboody, director of property lender MT Finance, continued that affordability was still a “huge strain on buyers” and the lack of stock was “another stumbling block for would-be property purchasers”.

‘Although stock levels have improved slightly on last year, they are still below pre-pandemic levels, resulting in competition for the best properties at the correct price.

“Hopefully, some market stability establishes itself soon, which in turn should bring some confidence and further stock to tempt buyers,” he added.