The real estate market kicked off the new year with a strong surge following a significant rise in prices. The average home price has increased by nearly £9,900 to £368,031 since December, as reported by property website Rightmove. This 2.8% spike represents the largest January increase in Rightmove’s 25-year history and the most substantial month-on-month rise since June 2015.
Rightmove attributed the market’s rebound to Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled prior rumors and uncertainties that had dampened 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 amid overall national increases.
Following the holiday season, there was a notable increase in buyer demand, with a 57% surge in inquiries to agents and an 81% rise in newly listed properties compared to the preceding two weeks. This heightened demand has been supported by decreasing mortgage rates, with several major lenders implementing rate cuts at the end of 2025 and the start of this year.
Colleen Babcock, a property expert at Rightmove, expressed optimism about sellers listing their properties at higher prices, reflecting increased buyer interest. However, she advised sellers to be cautious and realistic in setting asking prices due to the current market dynamics. Myles Moloney, director at Chase Buchanan estate agents in London, highlighted the active market and emphasized the importance of well-presented homes meeting buyers’ preferences, such as open-plan living spaces and proximity to quality schools.
The market is witnessing early momentum in 2026, with families keen to make moves and secure their next homes promptly. Improvements in affordability through mortgage rate reductions are aiding this trend, particularly for homes that align with modern family living preferences.