UK asking prices rise 1% as mortgage rates strain buyers

UK asking prices for newly listed homes rose 1% in October, but the increase was below the usual seasonal rise and prices remained 0.1% lower than a year earlier. Rightmove said higher mortgage rates—averaging 5.55% for a two-year fixed loan, up from 4.25% before the Iran war began—were straining affordability, prompting sellers in several lower-priced, previously resilient areas to cut asking prices. Agreed sales were 8% below a year earlier, while the number of homes for sale was the highest for this time of year since 2014. London asking prices rose 2.5% in October after falling over the summer, but remained 1.7% below a year earlier, and many listings still required price reductions. Buyers’ caution ahead of the government’s forthcoming budget and uncertainty about mortgage costs added to the market’s price sensitivity.