The housing market kicked off the new year with a strong uptick following a historic surge in prices. According to property website Rightmove, the average home price has increased by nearly £9,900 to £368,031 since December. This 2.8% rise represents the largest January jump in Rightmove’s 25-year history and the most significant month-on-month increase since June 2015.
Rightmove attributed the market rebound to Chancellor Rachel Reeves’ Budget announcement in late November, which dispelled prior rumors and uncertainties that had dampened activity. However, the company cautioned potential sellers that market conditions remained challenging. The inventory of homes for sale is at its highest level for this time of year since 2014, with a third of listed properties experiencing price reductions. Regional disparities were also noted, with the East Midlands and Scotland seeing price declines while most other regions reported price increases.
Buyer demand surged in the two weeks post-Christmas Day, 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 was supported by declining mortgage rates, as major lenders made notable rate cuts towards the end of 2025 and the beginning of this year.
Colleen Babcock, a property expert at Rightmove, expressed optimism about sellers listing homes at higher prices this year. However, she advised sellers to heed their agents’ guidance when setting asking prices to avoid overpricing in a market with a twelve-year high in available inventory. Myles Moloney, director at Chase Buchanan estate agents in London, noted a busy market characterized by properties meeting buyers’ current preferences, such as homes with strong schooling options and spacious living areas.
The trend towards early market activity in 2026 was attributed to families seeking to secure their next homes promptly, taking advantage of improved affordability due to mortgage rate reductions. Well-presented, reasonably priced homes tailored for modern family living were highlighted as attracting the most attention in the current market dynamics.