Revesto – INDEX
UK Housing Market Update – October 2026
Market Overview
As of 6 October 2026, the UK housing market is entering the final quarter under renewed pressure from borrowing costs and economic uncertainty. A full October monthly house-price index is not yet available, so this update uses the latest September market data and October developments available at the date of publication.
The key change entering October is the sharp rise in mortgage pricing. By 5 October, the average five-year fixed mortgage rate had reached 6.00% and the average two-year rate was close to 5.98%, as rising gilt and swap rates pushed lenders to reprice products. This is materially more restrictive for buyers than the conditions reflected in the June baseline.
Key Highlights
- Latest Rightmove asking price (September): £367,440 (+0.7% MoM; -0.8% YoY).
- Latest Nationwide completed-price data (September): £274,251; annual growth 0.8%; -0.2% MoM.
- Average five-year fixed mortgage rate reached 6.00% by 5 October; the average two-year rate was about 5.98%.
- The number of fixed-rate mortgage products priced below 5% reportedly fell sharply as lenders repriced.
- August mortgage approvals for new purchases fell to 54,918, the lowest level since December 2023.
National Average Asking Price by Market Sector (Excluding Inner London)
| Buyer Type | Average Price | MoM Change | YoY Change |
|---|---|---|---|
| First-time buyers | £225,199 | -0.1% | -0.9% |
| Second-steppers | £344,837 | +0.9% | -0.1% |
| Top of the ladder | £672,728 | +0.9% | +0.5% |
Source: Rightmove (latest available September 2026 data; carried forward for October MTD)
Regional Performance
- London and southern markets remain the most exposed to affordability and higher borrowing costs, while northern England, Scotland and Northern Ireland have shown greater resilience.
- Rightmove's September data showed only 42% of homes finding a buyer in London compared with 91% in Scotland.
- Construction conditions also remain challenging: the September S&P Global/CIPS construction PMI improved to 46.1 from 44.3 but remained below 50, indicating continued contraction.
Mortgage Market
Mortgage pricing is the principal near-term risk. Rising gilt yields and swap rates have pushed lenders to increase fixed-rate pricing even though the Bank of England base rate has remained unchanged since December 2025.
Higher refinancing costs are likely to constrain purchasing budgets and may cause some buyers to postpone transactions. This is particularly relevant for projects whose exit assumptions depend on high leverage or rapid turnover.
Outlook
October begins with a weaker and more uncertain outlook than the June baseline. The market is not showing evidence of a broad collapse, but affordability, financing costs, subdued transaction volumes and elevated supply point towards a slower and more price-sensitive market.
For Revesto, the appropriate stance is conservative: stress-test exit values and sales periods, avoid relying on aggressive house-price appreciation, maintain contingency in development budgets and prioritise locations with durable end-user demand.
This October edition is explicitly a month-to-date update as of 6 October; the next edition should incorporate the October Rightmove index, October mortgage-market data and the UK Budget scheduled for later in the month.