The week in one sentence
The Bank of England has held Bank Rate at 3.75%, inflation has eased to 2.6%, but mortgage rates and buyer caution are still doing the real work in the housing market.
That combination sounds contradictory. It is not. The base rate is only one input into mortgage pricing, while confidence is shaped by affordability, politics, global events and whether buyers believe a home represents fair value. This week’s figures describe a market that is functioning—but only when price, presentation and property align.
The numbers that matter
Rightmove reports that the average asking price of a newly listed home fell 1.0% in July to £372,359. A summer dip is normal; the ten-year July average is only 0.2%, so this was a materially larger adjustment. Market activity was 6% below the same period last year.
Zoopla’s July index points in the same direction. Sales agreed were 9% lower than a year earlier, July was the weakest month for activity so far in 2026, and the supply of homes for sale increased in eight of 11 regions. More choice means buyers can compare harder and negotiate with greater confidence.
There is a small counter-signal. Bank of England data shows mortgage approvals for purchases rose from 56,200 in May to 58,200 in June. That is improvement, but still below the previous six-month average of roughly 61,400. In other words, demand has not disappeared; it remains restrained.
Rates: the headline is calmer than the mortgage market
The Bank of England held Bank Rate at 3.75% on 30 July. June CPI inflation fell from 2.8% to 2.6%, which was better than expected, but the Bank warned that volatile energy prices could push inflation higher again later this year.
For buyers, the practical rate is the mortgage rate—not Bank Rate. Rightmove’s mortgage tracker put average two-year and five-year fixes at 5.11% and 5.13% on 30 July, both slightly higher over the week. Buyers therefore have more certainty than during the sharpest shocks, but borrowing is not becoming cheap enough to rescue an over-ambitious asking price.
Mark’s View: this is a market of consequence
In a booming market, several mistakes can be hidden. A seller can launch slightly too high, use average photography, wait too long to react and still find momentum. In this market, every mistake has a cost.
The homes getting traction are not necessarily the cheapest. They are the ones where the buyer can understand the value immediately. Strong presentation creates attention; accurate pricing converts that attention into viewings; confident estate agency turns viewings into competition.
The danger is death by small reductions. Launching above the evidence, waiting for the market to agree and then trimming the price repeatedly can make a perfectly good home feel rejected. A sharper opening position is often more powerful than a larger asking price followed by weeks of silence.
South West London
Family houses in established neighbourhoods still benefit from genuine needs-based demand: schools, gardens, extra bedrooms and long-term roots. But buyers are comparing across micro-markets more aggressively. A buyer considering Fulham may also test Putney; someone focused on Balham may widen into Streatham or Tooting when the value difference becomes compelling.
That makes local positioning essential. The question is no longer simply, “What did the house next door sell for?” It is, “What else can this buyer purchase today, with the same monthly budget?” Sellers who understand that competitive set will outperform sellers anchored to an old peak.
Prime Central London
Prime Central London is even less useful as a single statistic. A best-in-class, turnkey home in Chelsea, Belgravia, Notting Hill or Holland Park can attract demand that is largely detached from the average mortgage borrower. At the same time, compromised or optimistically priced stock can sit for months.
There are buyers, including international and cash buyers, but they are rarely under pressure to act. They pay for rarity, condition, address and discretion. They do not pay merely because a property is in a prime postcode. At this end of the market, the gap between exceptional and ordinary is widening.
Policy: less speculation, more certainty
The new government has indicated that Stamp Duty will not change at the Autumn Budget, while debate over the wider property-tax system continues. Whatever one thinks of Stamp Duty, removing an immediate reform from the table gives active buyers and sellers one less reason to delay a decision in expectation of a Budget windfall.
Tax still shapes liquidity—particularly in London, where transaction costs are significant—but waiting for a perfect policy environment is not a strategy. The more useful question is whether a move works for the individual household at today’s price and today’s funding cost.
What I would do now
If I were selling, I would treat the next few weeks as preparation for the early-autumn market: agree a defendable price, produce exceptional creative, remove anything that gives a buyer an easy objection and launch with intensity rather than drift.
If I were buying, I would keep finance fully updated and become more active. Greater choice and slower competition create leverage, but the best homes can still move quickly. Negotiate hard on replaceable stock; act decisively on something genuinely rare.
The market is neither booming nor broken. It is selective. That is uncomfortable for sellers who want the market to validate an arbitrary number—but useful for anyone prepared to make a precise decision.
