The housing market has kicked off the 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% spike 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 at the end of November, which dispelled previous uncertainties that had subdued market activity. Despite the positive momentum, Rightmove cautioned prospective 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 existing listings experiencing price reductions. Market conditions vary widely across regions, with fluctuations noted, especially in the East Midlands and Scotland where prices declined.
Buyer interest surged in the two weeks post-Christmas Day, with a 57% increase in inquiries to agents and an 81% rise in new listings compared to the preceding two weeks. This heightened demand has been supported by declining mortgage rates, with major lenders implementing significant rate cuts towards the end of 2025 and early 2026.
Colleen Babcock, a property expert at Rightmove, expressed optimism at sellers listing their properties at higher prices, attributing the trend to increased buyer activity. However, she emphasized the importance of setting realistic asking prices in line with market conditions. Myles Moloney, director at Chase Buchanan estate agents in London, noted a busy market characterized by high interest in well-presented homes with modern living features. Families seeking homes with strong schooling options and spacious living areas are driving the current market trends, with a preference for early action in 2026 rather than waiting for the traditional spring market.
Overall, the market is dynamic, with affordability improvements through mortgage rate cuts and well-priced, modern family homes attracting significant attention from buyers.