The housing market kicked off the year on a positive note with a significant surge in prices. According to property website Rightmove, the average home price has increased by nearly £9,900 to reach £368,031 since December. This 2.8% rise in January marks the largest monthly increase the company has recorded in its 25-year history, and the most significant month-on-month spike since June 2015.
Rightmove attributed this market rebound to Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled previous rumors and uncertainties that had dampened activity.
Despite the uptick in prices, 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 the year since 2014, with a third of listed properties experiencing price reductions. Regional variations persist, with the market showing volatility. While most regions saw price increases, the East Midlands and Scotland witnessed declines.
Buyer interest surged in the two weeks following Christmas Day, with a 57% increase in inquiries to agents about homes for sale and an 81% rise in newly listed properties compared to the preceding two weeks. This heightened demand has been supported by decreasing mortgage rates, following notable rate cuts by major lenders at the close 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 after a period of subdued growth. She emphasized the importance of realistic pricing to attract buyers in the current market environment, which boasts a twelve-year high in the number of homes for sale.
Myles Moloney, director at Chase Buchanan estate agents in London, noted the bustling market activity and highlighted the appeal of homes that align with current buyer preferences, such as those with strong schooling options and spacious open-plan living areas. Family home buyers are particularly active at the beginning of this year, seeking well-presented properties that cater to modern family living needs.
As affordability improves due to mortgage rate reductions, sensibly priced and well-presented homes are garnering the most attention and interest from buyers.