The housing market has kicked off the new year with a strong surge following a remarkable rise in prices. According to Rightmove, the average home price has increased 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 jump since June 2015.
Rightmove attributed this market rebound to Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled previous uncertainties and rumors 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 listed properties experiencing price reductions. Market conditions vary widely across different regions, with the East Midlands and Scotland experiencing price declines while most other regions saw price increases this month.
Post-Christmas, buyer demand surged significantly, 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. The demand has been further fueled by decreasing mortgage rates, as several major lenders announced rate cuts towards the end of 2025 and the beginning of this year.
Colleen Babcock, a property expert at Rightmove, expressed optimism about the market’s start to the year, highlighting seller confidence in listing homes at higher prices. However, she advised sellers to heed their agents’ guidance when setting asking prices to avoid overpricing. With a record number of homes for sale, sellers are urged to be realistic to attract buyers.
Myles Moloney, director at Chase Buchanan estate agents in London, noted the increased activity in the market, particularly for homes meeting specific buyer preferences such as those with strong schooling options and spacious open-plan living areas. The market has seen a surge in family home buyers early in 2026, driven by affordability improvements through mortgage rate cuts. Well-presented homes priced sensibly for modern family living are garnering the most attention from buyers.