Nikka Sulton

Average asking prices for homes across Great Britain rose by £3,575 in October, although the property market remains highly sensitive to pricing as higher mortgage rates continue to stretch buyers’ budgets.

According to Rightmove, the average asking price of a newly listed property increased by 1% month-on-month to £371,015. Despite the monthly rise, prices remained 0.1% below their level a year earlier, highlighting the market’s limited annual growth.

London recorded a stronger monthly increase, with average asking prices climbing by 2.5% to £673,942. However, prices in the capital were still 1.7% lower than in October last year. Rightmove attributed part of the latest increase to a seasonal recovery following a weaker summer, as sellers attempt to regain lost ground ahead of the Christmas period.

Rising Mortgage Rates Put Pressure on Buyers

Colleen Babcock, a property expert at Rightmove, said the recent increase in mortgage rates was beginning to affect what buyers could afford. Even areas where house prices had remained relatively resilient were starting to feel the impact of higher borrowing costs.

She emphasised that sellers need to set realistic asking prices from the outset to make the most of initial interest from potential buyers. With affordability becoming more challenging, properties that are priced too ambitiously may struggle to attract offers.

Rightmove’s figures support this cautious outlook. The number of new buyers contacting estate agents about properties was 9% lower than a year earlier, while new property listings increased by 3%. The total number of homes available for sale also remained at its highest level for this time of year since 2014.

The combination of weaker demand and greater choice for buyers is limiting price growth, making competitive pricing increasingly important.

Babcock noted that sellers are responding differently to current conditions. Some may be able to reduce their expectations, while others need to maintain their asking prices to make their next property purchase financially viable. In some cases, this could mean waiting longer to find a suitable buyer.

Buyers Reassess Their Budgets

Matt Smith, a mortgage expert at Rightmove, said the rapid rise in mortgage rates had created difficulties for buyers who had calculated their budgets using lower borrowing costs earlier in the year.

As rates increase, some prospective homeowners may need to reconsider their spending limits and decide how much they are comfortable borrowing.

Property professionals also stressed the importance of realistic valuations. Michael Donnachie, director at Michael Anthony Village Estates in Aylesbury, said buyers are paying closer attention to affordability and value for money, making the initial asking price particularly important.

In London, Marc von Grundherr, director of Benham and Reeves, said seasonal trends were also influencing the market as activity picked up following the summer.

Nathan Emerson, chief executive of Propertymark, added that the market’s direction in the coming months would depend largely on changes in inflation, interest rates and mortgage affordability.

Downsizing Could Help Homeowners Reduce Costs

The latest house price figures were released alongside research from Barclays examining homeowners’ attitudes towards downsizing.

The survey found that 24% of homeowners would consider moving to a smaller property, while 10% had already done so. On average, respondents said they would need to release approximately £108,516 from selling their homes for downsizing to be worthwhile.

However, the upfront costs associated with moving remain a significant obstacle. Stamp duty was identified as a deterrent by 27% of homeowners, while 21% cited moving expenses. Renovation or adaptation costs concerned 20%, and 19% pointed to legal or conveyancing fees.

Jatin Patel, head of mortgages, savings and insurance at Barclays, said downsizing could help homeowners find a property better suited to their needs, lower household expenses and improve their financial security. However, substantial upfront costs and a lack of suitable properties can make the decision more difficult.

The research was conducted by Opinium among 2,000 people across the UK in August.

Rental Market Faces Continued Supply Challenges

Separate Rightmove figures show that rental affordability remains a concern, with advertised rents reaching new highs across Britain.

Outside London, the average asking rent rose to a record £1,418 per calendar month in the third quarter of 2026, exceeding £1,400 for the first time. Annual rental growth in these areas stood at 2.4%, considerably slower than the increases of around 10% recorded between 2021 and 2023.

The number of available rental properties outside the capital fell by 2% compared with the previous year, while tenant demand also declined by 2%. Although this points towards a more balanced market, the limited supply of homes continues to put upward pressure on rents.

London experienced stronger rental growth. Average advertised rents reached a record £2,825 per month, representing a 3.2% annual increase. The capital’s rental market is facing a more pronounced supply shortage, with available properties down 9% year-on-year and tenant demand up 6%.

Rightmove also highlighted the impact of higher mortgage rates on landlords. Some are reaching the end of cheaper fixed-rate deals and facing significantly higher monthly payments when remortgaging. Meanwhile, investment in new buy-to-let properties has remained subdued.

These pressures could affect landlords’ rental yields and decisions about whether to retain or expand their portfolios.

Industry experts have also warned that tenants are increasingly focused on value for money, particularly at the higher end of the market. Realistic rents and well-presented properties remain important for attracting suitable tenants.

The wider challenge is the shortage of available rental homes. Although rent increases have slowed compared with previous years, constrained supply continues to limit tenant choice and support higher prices.

Realistic Pricing Remains Essential

Across both the sales and rental markets, affordability continues to influence decisions made by buyers, sellers, landlords and tenants. Higher mortgage rates are placing pressure on household budgets, while limited rental supply is keeping advertised rents elevated.

For sellers, the latest figures reinforce the importance of setting a competitive asking price from the beginning. With buyers becoming more cautious and the number of homes for sale remaining high, properties that offer good value are better positioned to attract interest in an increasingly price-sensitive market.