The rapid increase in mortgage rates is significantly affecting buyers’ budgets across the UK, as evidenced by the latest data from Rightmove. Despite a slight monthly uptick in asking prices, the overall trend shows a decline compared to last year, indicating that many potential buyers are feeling the pinch.
How Are Mortgage Rates Affecting Asking Prices?
Rightmove’s House Price Index reveals that while there was a monthly increase in asking prices, they are still 0.1% lower than a year ago. The average asking price for first-time buyer properties rose by 0.2% month-on-month to £225,627, although this figure is 0.5% lower than it was in October 2025. In contrast, second-stepper homes saw a modest increase of 0.1%, reaching an average asking price of £345,170, with annual growth of 0.3% for this segment.
What Areas Are Most Affected by Price Changes?
The data shows that the North East experienced a notable decline of 2% in average asking prices, now at £195,977. Other regions also reported decreases, with the North West down by 0.6% to £273,222 and Wales down by 0.3% to £267,735. Yorkshire and the Humber was the exception, recording a 0.3% increase to £260,019. These regional disparities highlight how elevated mortgage rates are influencing property values differently across the UK.
What This Means for First-Time Buyers
For first-time buyers, the current market conditions present challenges as rising mortgage rates squeeze budgets. With the average asking price for FTB homes still below last year’s levels, potential buyers may find it increasingly difficult to secure affordable housing. The drop in new buyer inquiries, down 9% compared to last year, suggests that many are hesitant to enter the market, possibly waiting for more favourable conditions or government announcements.
What to Watch Next in the Property Market?
As the Labour government prepares to announce its first Budget under Andy Burnham on 28 October, there is a sense of uncertainty among potential home movers. Many buyers are likely to hold off on making decisions until they see how the Budget may impact interest rates and housing policies. This anticipation could further affect market activity, especially in the lead-up to the announcement.
