London Home Asking Prices Jump as UK Mortgage Costs Rise
Rightmove reports a sharp increase in London asking prices despite a broader UK housing slowdown driven by surging mortgage rates and buyer uncertainty.
London home sellers increased asking prices by 2.5% in October, following a 1.8% rise in September, marking the largest early autumn increase in over a decade. This shift follows a poor summer where London was the worst-performing UK market, with prices dropping nearly 6% across July and August. Rightmove reports that many homeowners are now reluctant to lower prices further to avoid making their own onward moves unaffordable.
Across the broader United Kingdom, asking prices rose by a more modest 1% in October. The market remains fragile as mortgage rates, driven by inflation and an energy crisis linked to the war in Iran, have surged. The average two-year fixed rate reached 5.55% in October, up from 4.25% in February. This has led to a reversal of historical trends; data from Hamptons shows first-time buyers in September paid an average of £1,266 per month for mortgages, exceeding the £1,227 average rent.
Market activity has slowed significantly, with agreed sales falling 8% compared to last year and home listings reaching a 12-year high. While London sellers are holding firm, those in Scotland, Wales, and northeast and northwest England have begun lowering prices as affordability drops. Potential buyers also remain hesitant ahead of Finance Minister John Healey's upcoming budget and further details on the First Home Scheme. In London, four in 10 listings are being discounted, and the average time to find a buyer has risen to 78 days.
