London's property market saw a welcome increase in asking prices during October, with average prices rising by 2.5%. It was the largest monthly increase of any region in Great Britain, but there is still a little way to go before the market can be described as having fully recovered.
According to Rightmove's October 2026 House Price Index, the increase follows a 6% fall in London asking prices across July and August. While October has helped make up some of that lost ground, prices are still 1.7% lower than they were this time last year.
So, while the latest figures offer some encouragement, there is more to the story than one month's increase.
A better month, but buyers are still taking their time
October is traditionally a busier period for the property market as people return from the summer break and start thinking about a move before the end of the year. This seasonal activity may have played a part in London's rise. Inner London saw an even bigger increase, with asking prices up by 3.9% during the month.
However, buyers are still taking their time, and sellers need to be realistic about what their property is worth. Figures show that 38% of London listings have had their asking prices reduced. Properties are also taking an average of 78 days to find a buyer, with just 42% successfully finding one.
These figures are a reminder that getting the price right from the outset remains important. A higher asking price does not necessarily mean a property will sell for that amount.
Mortgage costs remain a consideration
The cost of borrowing continues to influence decisions. The average two-year fixed mortgage rate rose to 5.55% in October, up from 5.29% the previous month. Before the conflict in Iran began, the average stood at 4.25%.
The increase has added around £250 a month to the cost of a typical new mortgage since February. For buyers already working within tight budgets, that is a significant difference and may mean taking more time to find the right property or reconsidering what they can afford.
What the autumn budget means for property
The Autumn Budget has also introduced several measures that buyers and landlords will want to keep an eye on.
For first-time buyers, the £4.7bn Your First Home scheme aims to make buying a new-build property more accessible. Eligible buyers in England will be able to use a government-backed equity loan, with the aim of helping around 70,000 households.
Landlords will also need to consider changes to the tax on rental income, with rates increasing by two percentage points from April 2027. This will take the rates to 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers.
There was also an additional £1.5bn announced for affordable housing, which is expected to support the delivery of around 10,000 social and affordable homes across England.
The effect of these changes will depend on individual circumstances, but they are worth factoring into any plans to buy, sell or invest in property.
Looking ahead
October's figures suggest that there is still activity in London's property market, even with higher borrowing costs and ongoing uncertainty. However, the gap between asking prices and what buyers are prepared to pay remains an important consideration. For sellers, understanding local demand and setting a realistic asking price can make a real difference. For buyers, taking the time to understand the market and explore the options available is just as important.
At Districts London, we provide expert property advice to buyers, sellers, landlords and tenants across London, with particular expertise in Canary Wharf, Prime Central London and the capital's riverside neighbourhoods. Whether you're considering your next move, reviewing a property investment or seeking insight into the London property market, our team is here to help. Contact Districts London for a confidential, no-obligation conversation.
