Asking prices for UK homes have recorded their sharpest August drop since 2018 in another sign that the property market is slowing after four consecutive months of house price falls.

New sellers listed their homes for £364,895 on average in the five weeks to August 12, £7,012 less than in the previous month, representing the biggest fall at this time of the year since the pandemic, according to data from Rightmove.

The 1.9% drop in asking prices comes at a time of record wage growth and easing mortgage rates, which suggest tentative signs of improved affordability for UK homebuyers hit by high borrowing costs after successive interest rate rises by the Bank of England.

Despite the drop in asking prices reported by Rightmove, average house prices remain nearly 20% higher than pre-pandemic levels four years ago. Tim Bannister, director at Rightmove, said: “There are still significant challenges in saving up enough for a deposit and affording higher mortgage payments.”