The average price of a property coming on to the market in the UK dropped by 1.2 per cent to £373,709 this month, a fall of £4,500 from last month, according to Rightmove data, writes Laura Purkess.

While there is often a seasonal dip in prices over summer, this marks the biggest July price drop recorded in at least 20 years, the property website said.

London has been a driver of asking price falls among new sellers, with prices falling by 1.5 per cent across the capital.

Rightmove said April's increase in stamp duty has had a particular impact in London, where property prices are typically higher.

By contrast, the north-east of England has seen a 1.2 per cent increase in prices over the last month, continuing a trend of less expensive areas seeing faster price growth.

It comes as Rightmove has cut its house price forecast for 2025 from 4 per cent growth to 2 per cent.

The website said that a high level of seller competition right now is limiting price growth.

However, while falling prices are bad news for sellers, Rightmove said this is helping to tempt new buyers onto the market, which is driving up new enquiries and overall sales figures.

The number of sales being agreed is now 5 per cent higher than this time last year, its figures show.

Colleen Babcock, property expert at Rightmove, said: "We are seeing an interesting dynamic between pricing and activity levels right now.

"The healthy and improving level of property sales being agreed shows us that there are motivated buyers out there who are willing to finalise a deal for the right property.

"It appears that new sellers are responding to this high-supply market with stand-out pricing to entice buyers and get their home sold."

Rightmove said that with mortgage rates falling and two further Bank of England base rate cuts still expected in 2025, the outlook for the second half of the year remains positive.

The website's mortgage tracker shows the average two-year fixed mortgage rate is now 4.53 per cent, down from 5.34 per cent this time last year.

Many lenders have also recently relaxed their criteria in response to changes in rules by the City watchdog, allowing some borrowers to potentially take out bigger loans.

Babcock said: "We expect market activity to continue to be resilient. Crucially, buyer affordability is heading in the right direction."