The average asking price for a home in Britain increased by £3,575 month-on-month in October, reaching £371,015, according to property website Rightmove. This represents a 1.0% rise compared with September, though prices are still 0.1% lower than a year ago.
In London, the average asking price jumped by 2.5% month-on-month to £673,942. However, Rightmove noted that this follows a particularly weak summer in the capital, with new sellers clawing back some of that lost ground. The average asking price in London in October remained 1.7% lower than a year earlier.
Mortgage Rates Pressure Buyer Budgets
Colleen Babcock, a property expert at Rightmove, said: "The rapid rise in mortgage rates is really beginning to hit buyers' budgets." She added that mortgage rate increases are now feeding through to seller pricing in many of the cheaper parts of Great Britain, where prices had been more resilient this year.
Babcock described this as "an early sign that higher mortgage costs are putting pressure on affordability even in markets with lower property prices, affecting the areas and types of property that buyers can afford." She emphasised that competitive pricing from day one of marketing is critical to capitalise on initial buyer interest.
Market Activity and Supply Trends
Rightmove reported that the number of new potential buyers contacting agents about properties is 9% lower than a year ago, while new listings coming to market are 3% higher. The total number of homes available for sale remains at its highest level for this time of year since 2014, contributing to muted new seller asking price growth.
Matt Smith, a mortgage expert at Rightmove, said: "It's been a difficult few weeks for home buyers who have been watching mortgage rates rise quickly, particularly for those who had worked out what they could afford based on lower rates earlier in the year." He noted that some buyers will be reassessing their budget and what they can afford or feel comfortable borrowing.
Industry Reactions and Downsizing Survey
Michael Donnachie, director at Michael Anthony Village Estates in Aylesbury, said: "With mortgage rates rising buyers are having to be more considered about what they can afford and what represents good value." Marc von Grundherr, director of Benham and Reeves in London, commented: "There's certainly an element of seasonality at play, with the summer firmly behind us and the London market gearing up for one final push before Christmas."
Nathan Emerson, chief executive of property professionals' body Propertymark, said: "Looking ahead, much will likely depend on how inflation, interest rates and mortgage affordability evolve over the coming months and into the new year."
A separate survey from Barclays indicated that a quarter (24%) of homeowners would be open to downsizing, with one in 10 (10%) saying they have already done so. On average, homeowners said they would need to release around £108,516 from their property sale for downsizing to feel worthwhile. Costs were found to be an obstacle, with 27% of homeowners citing stamp duty costs, 21% highlighting moving costs, 20% mentioning renovation or adaptation costs, and 19% noting legal or conveyancing fees.
Jatin Patel, head of mortgages, savings and insurance at Barclays, said: "Downsizing can give homeowners the opportunity to find a property that better suits their needs, reduce household costs and strengthen their financial resilience. However, the decision is rarely as simple as moving to a smaller home. Significant upfront costs and a shortage of suitable options can make a move difficult to justify, even for those who are open to it." Opinionum Research surveyed 2,000 people across the UK in August for Barclays.
