The property market has kicked off the new year with a surge following a significant rise in prices. According to data from 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 rise since June 2015.
Rightmove attributed this market rebound to Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled previous uncertainties that had been hindering market activity. However, the company cautioned potential sellers that the market remains challenging. The current number of homes available for sale is the highest for this time of year since 2014, with one-third of listed properties experiencing price reductions. Market conditions vary across regions, with the East Midlands and Scotland experiencing price declines while most other regions saw price increases.
Buyer demand 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, as major lenders implemented notable 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 homes at higher prices, indicating growing buyer interest. However, she advised sellers to heed their agents’ guidance when setting asking prices to avoid overpricing, considering the current market dynamics. Myles Moloney, director at Chase Buchanan estate agents in London, highlighted the busy market, emphasizing the appeal of homes meeting buyers’ preferences, such as those with strong schooling options and spacious open-plan layouts.
The market has seen increased activity from families seeking modern living spaces, with affordability improvements from mortgage rate reductions playing a significant role. Well-presented homes priced sensibly for contemporary family needs are attracting heightened attention, as buyers seek to make early moves in 2026 rather than waiting for the traditional spring market.
