The housing market has kicked off the new year with a strong surge following a significant rise 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% jump represents the largest January increase in Rightmove’s 25-year history and the most substantial month-on-month growth since June 2015.
Rightmove attributed the market’s recovery 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 momentum, Rightmove 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 one-third of listed properties experiencing price reductions. Market conditions vary significantly across regions, with the East Midlands and Scotland witnessing price declines while most other areas saw price increases.
Buyer demand surged in the two weeks post-Christmas Day, with a 57% increase in inquiries to agents about homes for sale and an 81% rise in new property listings compared to the preceding two weeks. This heightened demand has been supported by declining mortgage rates, sparked by major lenders cutting rates at 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 and the return of buyers to the market. However, she advised sellers to heed their agents’ guidance in setting realistic asking prices, considering the current abundance of listings and the necessity of attracting buyers in the competitive market.
Myles Moloney, director at Chase Buchanan estate agents in London, noted the busy market and highlighted the appeal of homes meeting buyers’ preferences, particularly those with strong schooling options and spacious open-plan living areas. The market has seen increased interest from families looking for their second or third homes, with many eager to make early moves in 2026 rather than waiting for the traditional spring market.
Overall, improved affordability through mortgage rate reductions is driving buyer activity, emphasizing the importance of well-presented and reasonably priced homes that cater to modern family living for attracting buyer attention.