The average price tag on a home fell by 0.6% or £2,113 in June, in the biggest price drop recorded for this month of the year in 14 years, according to a property website.
The month-on-month fall took the average asking price across Britain to £376,191, Rightmove said.
The month of June typically sees modest price increases, Rightmove said.
It added that May’s warmer weather may have kick-started the usual summer slowdown earlier than usual this year, while the World Cup may also prove to be a distraction for some home movers.
Rightmove also said that more affordable parts of Britain, such as the North East of England and Scotland, are seeing prices hold up relatively well, compared with this time last year.
Colleen Babcock, property expert at Rightmove, said: “It’s unusual to see a price fall of this size in June, as we would normally expect to see modest price growth at this point in the year.
“What’s different this time is a combination of factors, including wider economic uncertainty, the timing of the May bank holiday and unusual heatwave, and the high number of homes on the market, which together appear to be bringing forward the traditionally slower summer market.
“In this kind of market, sellers need to work harder to attract attention.
“Setting a competitive asking price from the outset is key, as buyers are taking more time to compare options and are quick to move on if a home doesn’t stand out on value.”
Rightmove said higher mortgage rates are continuing to weigh on activity as many household budgets are squeezed, while the wider choice of homes for sale is encouraging buyers to take a less urgent approach unless a property really stands out.
Ms Babcock added: “While the summer market has come a bit early this year, overall activity is still within a typical historic range.
“What has changed is some buyer behaviour; with more homes to choose from and higher borrowing costs, buyers are deliberating more and taking longer over their decisions.”
Matt Smith, a mortgage expert at Rightmove, said: “It’s encouraging to see mortgage rates edging down slightly, and even relatively small reductions can make a difference to buyers’ budgets.”
Marc von Grundherr, director of Benham and Reeves, London, said: “Buyers aren’t moving at the pace we’ve seen in previous years, largely because current market conditions and an oversupply of stock are affording them the luxury of both time and choice.”
Henry Crane, a partner at James Laurence Estate Agents, Birmingham, said: “Overall, while demand remains, it is highly price-sensitive and selective, with the best-positioned homes continuing to perform strongly.”
Matthew Harvey, a partner at Tayler & Fletcher, Cotswolds, said: “Demand in the higher middle market remains steady, led by lifestyle and schooling needs.
“At the top end, price adjustments are largely a correction of earlier overpricing following the post-Covid surge.
“Overall, realistically-priced homes are selling well, with many recent listings already finding buyers.”
The report was released as a separate index from property firm Hamptons indicated that the average price of a newly agreed let in Britain rose 1.1% over the year to May, slowing from a 1.2% annual increase in April.
The average rent paid by a tenant moving into a property in Britain was £1,382 per month in May, Hamptons said.
Regionally, the average new let rent in the South East of England reached £1,500 per month in May, up by 2.0% annually.
Hamptons said this is the first time it has recorded any region outside London with rents reaching the £1,500-per-month mark.
Aneisha Beveridge, head of research at Hamptons, said: “While rental growth on newly agreed lets remains cool by recent standards, landlords appear to be taking a more cautious approach when selecting new tenants.
“Many are showing a willingness to wait for the right tenant rather than accept the first offer, which has reduced the number of homes let and helped to keep a lid on rental growth for new tenants.”
Hamptons’ monthly lettings index has been running since 2011 and uses data from the Connells Group to track changes to the cost of renting. The index is based on achieved rather than advertised rents.
Here are average monthly rents for newly let homes in May, according to Hamptons, and the annual change:
London, £2,294, 0.6%
East of England, £1,225, 0.3%
South East, £1,500, 2.0%
South West, £1,265, 0.9%
East Midlands, £987, minus 0.9%
West Midlands, £1,107, 2.6%
North East, £856, 3.8%
North West, £1,042, 1.8%
Yorkshire and the Humber, £927, 1.4%
Wales, £887, 1.1%
Scotland, £1,029, 0.6%
