The housing market kicked off the new year with a strong surge in prices, reaching a record high. According to property website Rightmove, the average home price increased by nearly £9,900 to £368,031 since December. This 2.8% spike represents the largest January increase in Rightmove’s 25-year history and the biggest month-on-month rise since June 2015.
Rightmove attributed the market rebound to Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled previous uncertainties that had subdued activity. Despite the positive momentum, 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 across regions, with the East Midlands and Scotland seeing price declines while most other regions saw increases.
Buyer demand surged in the weeks following Christmas, with a 57% increase in inquiries to agents about homes for sale and an 81% rise in newly listed properties compared to the previous two weeks. This demand was supported by decreasing mortgage rates due to significant cuts from major lenders at the end of 2025 and the start of 2026.
Colleen Babcock, a property expert at Rightmove, expressed optimism about the market, noting sellers’ confidence in listing homes at higher prices. However, she advised sellers to be cautious and realistic in setting asking prices given the current market dynamics. Myles Moloney, director at Chase Buchanan estate agents in London, observed a busy market with a growing interest in family homes featuring specific amenities like open-plan kitchens and proximity to quality schools.
The market is witnessing an early uptick in family home buyers eager to make their next move in 2026. Affordability improvements through mortgage rate cuts are facilitating these transactions, with well-presented properties geared towards modern family living attracting the most attention.