The housing market kicked off the new year with a strong surge following a remarkable increase in prices. According to property website Rightmove, the average home price has risen by nearly £9,900 to reach £368,031 since December. This 2.8% jump represents the largest January increase in Rightmove’s 25-year history and the most significant month-on-month rise since June 2015.
Rightmove attributed this market rebound to Chancellor Rachel Reeves’ Budget announcement in late November, which dispelled previous rumors and uncertainties that had dampened activity. However, the company cautioned potential sellers that the market remains challenging. The number of homes available for sale is the highest for this time of year since 2014, with a third of listed properties experiencing price reductions. Market conditions vary widely across regions, with the East Midlands and Scotland witnessing price declines while most other areas saw increases.
Buyer demand surged in the two weeks following Christmas Day, with a 57% increase in inquiries to agents about homes for sale and an 81% rise in newly listed properties compared to the preceding two weeks. The market has been buoyed by decreasing mortgage rates, with several major lenders announcing rate cuts at the end of 2025 and the start of this year.
Colleen Babcock, a property expert at Rightmove, noted the positive start to the year with sellers listing properties at higher prices. However, she advised sellers to heed their agents’ advice when setting prices due to the current high inventory levels and the prevalence of price reductions. Myles Moloney, director at Chase Buchanan estate agents in London, highlighted the bustling market activity, particularly for homes meeting buyers’ preferences such as spacious kitchens and family-friendly layouts.
The market is witnessing increased interest from families looking to make their next move early in 2026, attracted by well-presented homes priced competitively and tailored for modern family living. Mortgage rate cuts have improved affordability, driving attention towards properties that meet modern buyers’ requirements.