The 'mutual intelligibility' between Old Norse (Scandinavian) and Old English languages in Viking Age British Isles has a long history of debate and researchers have not reached an agreement yet. The latest researches, conducted by Matthew Townend, indeed argue that two language communities, respectively that of Old Norse and that of Old English, were co-existed in the 10th century, and Old Norse speakers could understand the word of place and personal names of their English neighbors to more greater extent than previously assumed, based on some textual analysis of the contemporary texts (Hadley 2006: 92-95).

Two provisos are to be noted, however, one for his hypothesis and another for OP's question above:

• The oldest Old English text that Townend analyzes in detail is Old English translation of Orosius, written after the latest years of King Alfred's reign (he died in 899). Thus, his thesis and extant evidences did in fact not cover the very first phase of Norsemen's onslaughts in the first half of the 9th century, I suppose.
• I'm not really an expert in historical linguistic, but the history of 'North/ Western Germanic' languages since the Middle Ages have been much more complex than generally assumed. To give an example, today's Norwegian (two variants, but especially more popular bokmål) is much closer to early modern Danish over medieval Old Norse.

References:

• Hadley, Dawn M. The Vikings in England: Settlement Society and Culture. Edinburgh: Edinburgh UP, 2006.
• Townend, Matthew. 'Viking Age England as a Bilingual Society'. In: Cultures in Contact: Scandinavian Settlement in England in the Ninth and the Tenth Centuries, ed. Dawn M. Hadley & Julian D. Richards, pp. 89-105. Turnhout: Brepols, 2000.