Supply sits at a 12-year September high
The average two-year fixed mortgage rate has risen to 5.29%, up from 5.09% in August and 4.25% before the war in Iran began, according to Rightmove. The portal estimated that the monthly payment on a new mortgage is now about £180 higher than before the conflict started.
Rightmove described the war, which began at the end of February, as a driver of higher mortgage rates and said there is little sign that it will end soon.
Moneyfacts data showed the two-year fixed rate rose from 4.83% to 5.51% in the 24 days to March 24, with a net 21% of residential products (1,780 deals) withdrawn. Rightmove's rate figures use Podium Solutions data, a different source from Moneyfacts.
Lenders reprice while Bank Rate holds
The Bank of England held Bank Rate at 3.75% on September 17, its sixth consecutive hold, with inflation at 3.1% in August. A poll of 133 mortgage professionals found 57% expected a hold and 35% a rise, against 11% forecasting a rise in July.
The Monetary Policy Committee voted 6–3, with Megan Greene, Catherine Mann and Huw Pill preferring a rise to 4%, according to the Bank of England. The next decision is on November 5.
The same three members voted for a rise in July, when Zoopla estimated that higher rates had added about £125 a month to repayments on a typical UK home.
Halifax, Nationwide, HSBC and Santander raised rates in the days before the vote, some twice in a week, as swap rates climbed. Paul Hampton of Approved Mortgage Solutions said the repricing is rooted in swap rates.
Moneyfacts data shows the two-year fixed rate has risen from 4.84% in March to 5.73%, adding £131 a month to a £250,000 mortgage over 25 years. UK Finance puts 2026 maturities at about 1.8 million fixed-rate mortgages.
Matt Smith, Rightmove's mortgage expert, said volatility in rates remains a significant challenge for many and that "understanding your own personal affordability and how far you can stretch is really important in the current market".
Sales agreed and approvals move lower
Buyer demand is 9% below a year ago despite the usual rise from August. Sales agreed are 9% lower, new listings are 3% lower annually, and homes for sale are at a 12-year high for the time of year.
Bank of England figures show net mortgage approvals for house purchase fell to 56,100 in July from 58,200 in June, below a six-month average of about 60,800. Approvals for remortgaging with a different lender rose to 34,500 from 34,100.
Sellers take an average of 64 days to find a buyer and a further 150 days to complete, about seven months in total. Rightmove said sellers who cannot beat these averages may not move until after Easter.
On average, 61% of homes find a buyer, against 74% in 2021. The figure is 91% in Scotland, 71% in North West England, 56% in the South East and 42% in London, where asking prices rose 1.8% on the month but fell 2.6% on the year to £657,775.
Colleen Babcock, property expert at Rightmove, called the September rise a "modest recovery rather than a major turning point".
Asking prices turn after a summer of falls
The average asking price of newly listed homes rose 0.7% (+£2,441) to £367,440 in September, the first monthly rise since May, after a 2.0% fall in August to £364,999. The ten-year September average is 0.5%.
Prices are 0.8% below a year ago and 2.3% below the start of summer. The index stood at 284.1, against 282.2 in August, based on 125,207 asking prices listed from August 9 to September 12, 2026.
Excluding inner London, first-time buyer prices averaged £225,199 (-0.1% monthly), second-stepper homes £344,837 (+0.9%) and top-of-the-ladder properties £672,728 (+0.9%).
Budget and stamp duty
Tomer Aboody, founding director of specialist lender MT Finance, said buyer enquiries 9% lower than last year, higher borrowing costs and uncertainty over a new Prime Minister and Chancellor are acting as deterrents, with another Budget expected to bring more tax rises. He said "what is desperately needed is some market stimulus, ideally via stamp duty reform".
Prime Minister Andy Burnham confirmed that stamp duty will not change at the next Budget. Sam Kirtikar, chief executive of The Mortgage Broker, said this gives short-term certainty but does not mean the current system works well.
Chancellor John Healey is due to deliver the Budget on October 28.
Jeremy Leaf, a north London estate agent and former RICS residential chairman, said viewings have increased since the end of the summer holidays, but that "asking prices are not selling prices".
