House prices post largest fall since 2018 in August – Rightmove

“Many lenders have built greater resilience into their pricing, meaning they are generally better prepared to absorb shorter-term market shocks, which gives movers more stability even during periods of uncertainty.”

Smith added: “There are signs that, because of this additional buffer that lenders have built in, there is some scope for mortgage rates to reduce over the coming weeks, despite the geopolitical landscape still being quite volatile, and they have already started to edge downwards.”

Reaction:

Marc von Grundherr, director of Benham and Reeves: 

“There’s no denying that London is having a more challenging year than many other parts of the country and affordability is at the heart of it. 

“Higher property values mean London buyers feel every pressure point more acutely, whether that’s mortgage costs, stamp duty or the fact that many first-time buyers simply find themselves beyond the useful reach of schemes such as the Lifetime ISA.

“However, I wouldn’t characterise the London market as being in any sort of serious decline. 

“What we’re seeing is a much more price-sensitive market and sellers who acknowledge that are still finding buyers. 

“The difficulty arises where asking-price expectations remain anchored to a market that no longer exists, and that is particularly evident within parts of the flat market where buyers are also scrutinising service charges, lease terms and the wider cost of ownership far more closely than they perhaps did previously.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman: 

“Although asking prices are not selling prices but often reflect owners’, or agents’, aspirational starting points, these figures help demonstrate how difficult it has become to attract genuine buyers.

“Confidence has not been helped by continuing worries about the direction of travel for interest rates and inflation, while speculation about possible tax changes in the Budget is inevitably weighing on decision-making in a price-sensitive market.

“The change in occupier at Number 10 Downing Street has prompted some re-awakening of demand but not enough so far to reduce in sufficient numbers the amount of stock overhanging the market, particularly flats. 

“As a result, successful sellers need to go further than just set ‘fairly reasonable’ asking prices or make ‘token’ reductions as part of negotiations if they are serious about generating offers and achieving sales.”

Tomer Aboody, director of MT Finance: 

“With a further change in prime minister, along with the prospect of more taxation on the way, the property market is reacting negatively with buyers and sellers reluctant to make a move.

“As other opposition parties propose to cut stamp duty and some are even mooting the prospect of getting rid of it altogether, will the government respond by looking to do the same in order to get the market moving? It would definitely be a step in the right direction.”