UK asking prices rise 1% as the average two-year fix reaches 5.55%. What that means for a mortgage stress test

Asking prices for homes coming to market in Great Britain rose 1.0% this month, to an average of £371,015, according to Rightmove's House Price Index published on 19 October 2026.

A rise that hides a slower market

That looks like a good month, but October usually brings a rise of about 1.3%, and even after this £3,575 increase prices are 0.1% lower than a year ago.

Buyers are holding back. Sales agreed are 8% below the same period last year, enquiries from buyers are down 9%, and there are more homes for sale than at this time of year in any year since 2014.

Rightmove links much of this to the cost of borrowing. Across the mortgage market, it reports, the average two-year fixed rate has climbed to 5.55%, from 5.29% a month ago and 4.25% in February, before the war in Iran began. "The rapid rise in mortgage rates is really beginning to hit buyers' budgets," said Colleen Babcock, Rightmove's property expert.

How a higher rate can turn a pass into a fail

Lenders don't only check that a buyer can afford the payment today. On deals fixed for less than five years, they also test what happens if rates rise, and higher rates make that test harder to pass.

UK Affordability in Stresst runs the same kind of check. It turns one or two gross incomes into a borrowing range, estimates take-home pay and subtracts regular spending to leave a monthly surplus. It then tests the mortgage payment at the rate you enter plus a stress margin (1.5 points by default) and shows whether the surplus covers it.

Take an illustrative couple in England earning £42,000 and £36,000. The calculator puts their borrowing range with a standard high-street lender at £312,000 to £351,000, and their take-home pay at about £5,267 a month. After £250 of car finance, £950 of childcare and £1,900 of living costs, they have £2,166.60 left each month.

They want to buy at the average asking price with a £37,015 deposit and a £334,000 mortgage over 30 years, on a two-year fix.

• At February's average of 4.25%, the payment is £1,643.08. Tested at 5.75%, it rises to £1,949.13, and their surplus covers it with £217.47 to spare. Pass.
• At October's average of 5.55%, the payment is £1,906.91. Tested at 7.05%, it becomes £2,233.34, which is £66.74 more than their surplus. Fail.

Nothing about the couple has changed. Only the rate has.

Their monthly payment alone is £263.83 higher, close to the £250 Rightmove estimates rate rises have added to a typical new mortgage since February.

Lower the loan in the calculator until the test passes and it settles at £324,000. That's £10,000 less, so buying the same home would take a £47,015 deposit.

The cash needed on top of the deposit

The deposit isn't the only money due at completion. Total Purchase Costs, free in the Stresst app, adds stamp duty to editable estimates for legal, survey, lender, broker and Land Registry fees.

At £371,015 in England, a first-time buyer pays £3,550.75 in stamp duty. First-time buyer relief means nothing is due on the first £300,000 and 5% on the rest, for homes up to £500,000 (GOV.UK, checked 19 October 2026). Total buying costs come to £8,851, so with the £47,015 deposit the couple would need £55,866 in cash.

Someone moving home would pay £8,550.75 in stamp duty at the same price, taking total costs to £13,851 and the cash needed to £60,866.

For your own tax position, speak to a qualified UK tax adviser.

Run your own numbers in Stresst

Every figure in these examples came straight out of the Stresst app. Enter your own numbers and in a couple of minutes you'll see whether you pass the stress test and how much cash you'd need.

Total Purchase Costs is free, along with Mortgage Payment, the Stamp Duty Calculator and the Remortgage Calculator. UK Affordability is part of Premium, with Ltd vs Personal Name - Section 24 and the Rate Break-Even Analyser. Premium also lets you export any calculation as a PDF, and you can try it free for 7 days.

With the Budget on 28 October and the Bank of England's next rate decision on 5 November (Bank Rate is 3.75%), download it now and see where your numbers stand before either. On iPhone, Stresst is available as a beta through Apple's TestFlight app.

Download Stresst free on Google Play

Join the Stresst iPhone beta on TestFlight

Know your numbers before you commit.

Sources

• Rightmove House Price Index, October 2026, as reported by The Intermediary, "Asking prices up 1% as higher mortgage rates squeeze buyers: Rightmove", 19 October 2026. https://theintermediary.co.uk/2026/10/asking-prices-up-1-as-higher-mortgage-rates-squeeze-buyers-rightmove/
• Reuters via Global Banking & Finance Review, "UK housing market showing signs of mortgage rates impact, Rightmove says", 19 October 2026. https://www.globalbankingandfinance.com/uk-housing-market-showing-signs-mortgage-rates-impact/
• Bank of England, Bank Rate, accessed 19 October 2026. https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate
• HM Treasury, Chancellor letter to the Treasury Select Committee: Budget 2026 date, 31 July 2026. https://gov.uk/government/publications/chancellor-letter-to-the-treasury-select-committee-tsc-budget-2026-date
• GOV.UK, Stamp Duty Land Tax: residential property rates, accessed 19 October 2026. https://www.gov.uk/stamp-duty-land-tax/residential-property-rates
• Financial Conduct Authority, Interest rate stress test rule (MCOB 11.6.18R), accessed 19 October 2026. https://www.fca.org.uk/firms/interest-rate-stress-test-rule