The average price tag on a home jumped by just over £1,500 month-on-month in September as the autumn selling season got underway, according to Rightmove.

Across Britain, the typical new seller asking price is £370,257 in September, marking a monthly rise of 0.4% or £1,517.

Despite the September increase in prices, the first since May, the average asking price for a home in Britain is 0.1% or £502 lower than a year ago, Rightmove said.

It added that the first annual price drop since January 2024 is the culmination of several months of competitive pricing by new sellers over the summer, with the number of sales being agreed now 4% higher than a year earlier.

London and the more muted South of England are driving the annual dip in prices, with other areas of Britain being more robust, Rightmove said.

In the South West of England, asking prices are down by 1.3% compared with last year, while in the North West they have increased by 3.2%, highlighting the South’s underperformance, the report said.

Sellers in the South are facing strong competition. The number of homes for sale in the South of England is up by 9% on this time last year, compared to 2% across the rest of Britain, it added.

It also takes an average of five days longer to find a buyer in the South of England than in the North and Wales, Rightmove added.

But sales in the South are still higher than a year ago, indicating that buyers are happy to snap up homes at the right price, the report said.

Colleen Babcock, property expert at Rightmove said: “We’d expect to see a slight uptick in new seller asking prices in September, with the traditional back-to-school season boosting activity heading into autumn.

“This year’s 0.4% September price rise is a little lower than the norm, which is an average of 0.6% at this time of year. However, prices have now dipped slightly from where they were at this time last year after a summer of competitive pricing by sellers, and it’s the South of England which is driving this small dip.

“It’s the sensible and attractive seller pricing we’ve been reporting which has been helping to drive more sales activity compared to last year. Static house prices, rising wages, and lower mortgage rates all assist buyer affordability, which has led to an increase in the number of sales agreed compared to a year ago.”

Ms Babcock added: “Rumours of property tax changes began swirling in mid-August, and with the Budget itself not arriving until the end of November, this kind of extended uncertainty can affect market activity, especially in the higher price brackets.

“Movers want to be confident in planning their moving costs. Our real-time data has not yet picked up any major shifts, however, it’s understandable that those who could be negatively affected by the rumoured changes might be in the process of reassessing their short- and medium-term plans.”

Matt Smith, Rightmove’s mortgage expert, said: “Mortgage rates have edged upwards over the last few weeks as global events have made mortgage financing a little more expensive. Inflation is also proving sticky.”

He added: “The rhetoric around mortgages continues to be about how lenders can unlock greater affordability by allowing people to responsibly borrow more, which is encouraging for the market, particularly first-time buyers.”

The figures were released as a separate report, from property firm Hamptons, indicated that, across Britain, newly agreed rents fell by 0.4% annually in August – equating to a reduction of about £6 per month. The average monthly rent on a newly let property in August was £1,387.

Despite the recent slowdown, rents have risen faster than Consumer Prices Index (CPI) inflation over both the past five and 10 years, Hamptons said.

Had rents tracked inflation over the past five years, the average tenant would now be paying £1,308 per month typically – saving around £950 annually, it calculated.

Over a 10-year horizon, rents would stand at £1,253 per month if they had tracked inflation, representing an average annual saving of more than £1,600, according to the research.