Rightmove’s asking prices fell by 1.9% in August to £364,895, the biggest drop for this month since 2018. However, asking prices are still 19% higher than August 2019.

Home sales fell by 15% versus 2019 before the onset of the pandemic, while first-time buyer sales proved to be more resilient, dropping by a more moderate 10%. The number of properties listed for sale on Rightmove slumped by 10% versus August 2019.

The housing market boomed during Covid thanks to the stamp duty holiday and as households sought out bigger properties with gardens and space for at-home offices. However, today’s more subdued figures from Rightmove echo recent data from Nationwide and Halifax to suggest that the housing market is shrinking.

The Bank of England’s aggressive stream of rate hikes that have made it considerably more expensive to borrow are taking the heat out of the market, forcing buyers to respond to weaker demand by lowering their asking prices. Many would-be sellers are choosing not to list their properties at all, given the increased difficulty in achieving their desired selling prices. Stagnation in the housing market is prompting more individuals and families to turn to the letting market instead, pushing rents sharply higher. The increased cost of renting is shielding the first-time buyer market from deeper pain, where sales are softening but less aggressively.

Expensive mortgages, wider cost-of-living pressures, and a general backdrop of macroeconomic unease with sluggish growth and increasing slack in the labour market are taking their toll on house prices, which are expected to feel further pain as the year progresses. Asking prices are having to recalibrate to reflect the fact that home buyers cannot afford to borrow as much as a few years ago. However, stemming an even steeper slide in the market is the chronic shortage of housing supply in the UK.

The Telegraph has reported that Buying has become more expensive than renting for the first time in 13 years for would-be homeowners. First-time buyers now have to pay an extra £122 per month on a mortgage compared to if they rented the same property – an extra £1,500 per year, analysis shows.