The housing market kicked off the year with a strong surge in prices, marking a substantial increase since December. According to property website Rightmove, the average home price rose by nearly £9,900 to reach £368,031, representing a 2.8% jump – the highest January increase in Rightmove’s 25-year history and the largest month-on-month rise since June 2015.
Rightmove attributed this market rebound to Chancellor Rachel Reeves’ Budget announcement in late November, which dispelled earlier rumors and uncertainties that had subdued market activity. Despite the positive trend, Rightmove cautioned potential sellers about the challenging market conditions. The number of homes available for sale is currently at its highest level for this time of year since 2014, with a third of listed properties experiencing price reductions. Market dynamics vary across regions, with some areas experiencing price falls, notably the East Midlands and Scotland.
Buyer demand surged post-Christmas, with a 57% increase in inquiries to agents and an 81% rise in newly listed properties compared to the preceding two weeks. This heightened demand has been supported by decreasing mortgage rates, with major lenders implementing notable cuts at the end of 2025 and the start of 2026.
Colleen Babcock, a property expert at Rightmove, highlighted the positive start to the year but advised sellers to remain cautious in setting asking prices and to heed agent guidance to avoid overpricing. With a high number of homes on the market and a significant portion already reduced in price, sellers are encouraged to be realistic to attract buyers. Myles Moloney, director at Chase Buchanan estate agents in London, noted the current market activity, emphasizing the appeal of well-presented, sensibly priced homes equipped for modern family living, especially those meeting specific buyer preferences like open-plan spaces and proximity to quality schools.
