The housing market has kicked off the new year with a strong boost following a significant 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 in January marks the largest monthly increase in Rightmove’s 25-year history and the most substantial month-on-month jump since June 2015.
Rightmove attributed this market recovery to Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled uncertainties that had previously dampened market activity. Despite the positive momentum, Rightmove cautioned potential sellers about the challenging market conditions. The number of homes available for sale is at its highest level for this time of year since 2014, with one-third of listed properties experiencing price reductions. Market conditions vary widely across regions, with some areas experiencing price declines while most regions see price increases.
Buyer demand surged post-Christmas, with a 57% increase in inquiries to agents and an 81% rise in newly listed properties compared to the preceding two weeks. This increased demand has been supported by a continuous decline in mortgage rates, driven by major lenders’ rate cuts at the end of 2025 and the beginning of 2026.
Colleen Babcock, a property expert at Rightmove, noted the positive start to the year with sellers listing their properties at higher prices, as buyer interest returns to the market. However, sellers were advised to set realistic asking prices and consider market conditions to attract buyers effectively. Myles Moloney, director at Chase Buchanan estate agents in London, added that the market has been bustling, with homes meeting buyer preferences for features like open-plan spaces and proximity to quality schools garnering the most attention.
The current focus is on well-presented, sensibly priced homes equipped for modern family living, which are attracting significant buyer interest. The market is witnessing an early surge in family home purchases in 2026, driven by affordability improvements due to mortgage rate reductions. This trend indicates a proactive approach among buyers to secure their next property early in the year rather than waiting for the traditional spring market.