The online property advertiser attributed the rise to a rebound in prices after two months in which they fell, as well as a lack of supply and rising numbers of overseas investors.
The average asking price for properties in Greater London was £544,232 in October, compared to £493,748 the previous month.
In annual terms, asking prices rose 13.8%. The number of sellers in London increased 15% month-on-month.
Rightmove director Miles Shipside said a summer fall in sellers had pushed prices down: “However, this month’s rebound in the number of sellers brings the quarterly growth figure back in line with the recent trend at around 2% per month.
“Although not sustainable in the longer term, some agents currently report there is a buying frenzy in parts of prime inner London.”
According to the Rightmove index, a similar rebound effect occurred in October 2009, when London asking prices jumped 6.5%.
It downplayed the impact of the widely-publicised Help to Buy scheme, suggesting affordability was a bigger problem for Londoners than finding a deposit.
However, upmarket property agent and market commentator Henry Pryor suggested the government’s house price agenda could be fanning seller confidence.
He said: “Unless you have been in some backwater country you cannot have failed to notice three party conferences and all the hype about what the government is going to do to help house prices.”
Cash buyers in the prime London boroughs were also pushing up prices because they were not seeking valuations, he said.
Pryor, who purchases properties on behalf of wealthy clients, said he had bid for five properties in the past ten days and lost out in four. In each case, the price paid had been 10% over the guide price.
Average asking prices in the most affordable outer London boroughs were more than twice the average in the rest of England and Wales. By contrast, the average London wage was 60% higher than in the rest of the country, but roughly two-fifths of buyers in the capital received help from their family.
The upmarket London boroughs of Kensington and Chelsea and the City of Westminster topped the areas experiencing the biggest rise. In total, five boroughs saw above-average rises in asking prices.
In England and Wales as a whole, asking prices rose 2.8% on the previous month. After London, the East Midlands saw the biggest increase at 4.1%.
Rightmove’s October house price index has been published ahead of those from Halifax and Nationwide. In September it reported a monthly fall of 1.5%, compared to the slight increase suggested by the other two indices.
The index is compiled from the asking prices of properties listed by the 10,000 estate agent branches advertising on Rightmove’s website.
