The housing market has commenced the new year with a surge following a remarkable increase in prices. The average home price has risen by almost £9,900 to reach £368,031 since December, as reported by property website Rightmove. 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 at the end of November, which dispelled prior 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 conditions vary widely across regions, with the East Midlands and Scotland witnessing price declines while most other regions saw price increases.
Buyer demand surged significantly in the two weeks after Christmas Day, with a 57% increase in inquiries to agents and an 81% rise in newly listed homes for sale. This heightened demand has been supported by consistent reductions in mortgage rates by major lenders towards the end of 2025 and the beginning of this year.
Colleen Babcock, a property expert at Rightmove, noted that the current seller confidence is a positive indicator. However, sellers are advised to set realistic asking prices in consultation with their agents given the abundant housing inventory and the number of properties with reduced prices. Myles Moloney, director at Chase Buchanan estate agents in London, highlighted the increased activity in the market, particularly for homes meeting specific buyer preferences like open-plan living spaces and proximity to quality schools.
The market is witnessing a surge in family home buyers aiming to make early moves in 2026, driven by affordability improvements due to mortgage rate cuts. Well-presented homes priced sensibly and tailored for modern family lifestyles are attracting the highest levels of attention amidst the current market dynamics.