UK House Prices Jump £3,575 in October — But Rightmove Reveals the Brutal Catch for Sellers

I nearly fell off my chair when I saw the headline figure this morning: the average asking price of a home in Britain jumped by £3,575 in a single month. That sounds like champagne all round for sellers. It isn't. As anyone who's actually trying to sell right now will tell you, there's a big, ugly catch hiding inside the numbers — and it's getting uglier by the week.

Rightmove's October house price index, published this morning, puts the average asking price of a newly listed home at £371,015 — up 1.0% on September. But step back a little and the picture changes fast. Prices are still 0.1% lower than a year ago. The October bounce is smaller than the 1.3% average for the month. And underneath, the market is splitting in two: London roaring back while the cheaper parts of the country quietly cut prices.

London's bounce is real — but it flatters the figures

Almost the whole national increase comes from the capital. In London, asking prices leapt 2.5% month-on-month to £673,942, as sellers clawed back some of the ground lost during a miserable summer. Even so, London prices are still 1.7% below where they were last October.

Marc von Grundherr, director of Benham and Reeves in London, told reporters there was "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." Fair enough — October is traditionally when sellers pile in. But the seasonal bounce can't hide what's really driving the market.

The mortgage squeeze is biting — harder than before

Here's the catch. The average two-year fixed mortgage rate has hit 5.55%, up from 5.29% last month and miles above the 4.25% buyers were paying back in February, before the war in Iran upended energy markets and inflation forecasts. According to Rightmove's mortgage tracker, that's added around £250 a month to the cost of a typical new mortgage.

Colleen Babcock, Rightmove's property expert, didn't mince her words: "The rapid rise in mortgage rates is really beginning to hit buyers' budgets. We're now seeing mortgage rate rises feed through to seller pricing in many of the cheaper parts of Great Britain, where prices had been more resilient this year."

The proof is in the regions. Sellers in four of Britain's five most affordable areas actually cut their asking prices this month: the North East fell 2.0%, Scotland 1.9%, the North West 0.6% and Wales 0.3%. Yorkshire and the Humber was the only exception among the cheaper regions, managing a small 0.3% rise. This is the first real sign that the affordability crisis has moved beyond London and the South East.

Buyers are hesitating — and the Budget is why

It's not just rates. Rightmove says buyer uncertainty ahead of Chancellor John Healey's Budget on October 28 is making people sit on their hands. Some first-time buyers are holding off for more detail on the government's First Home Scheme. The result: buyer enquiries to estate agents are down 9% on a year ago, while sales agreed have fallen 8%. The number of homes sitting on the market is at its highest level for this time of year since 2014.

Jeremy Leaf, the north London estate agent and former RICS residential chairman, says competitive pricing is now the only thing that decides whether a seller secures a buyer. Rightmove's data backs him up: get the price right on day one, or watch your listing go stale while dozens of others pile up around it.

What this means if you're buying or selling

If you're selling, this is a buyer's market wearing a seller's mask. Price keenly or prepare to reduce — the days of "testing the market" are over. If you're buying, higher rates have knocked your budget sideways, but you've got more choice and more leverage than at any point in a decade.

Nathan Emerson, chief executive of Propertymark, summed up the outlook: "Much will likely depend on how inflation, interest rates and mortgage affordability evolve over the coming months and into the new year." And with the Budget just over a week away, everyone in property is holding their breath.

Editor's note: we searched for a recent broadcast video from a major UK outlet explaining today's Rightmove figures but could not verify a suitable one before publication. We'll add a video link when a verified one is available.

Sources

• AJ Bell / Alliance News — "£3,575 jump in average price tag on British home in October"
• Brit Brief — "UK house prices jump £3,575 in October but Rightmove reveals catch"
• IFA Magazine — "Signs that soaring mortgage rates are now biting harder"