The housing market kicked off the new year with a strong rebound following a remarkable surge in prices. According to property website Rightmove, the average home price has risen by nearly £9,900 to £368,031 since December. This 2.8% increase represents the largest January spike in Rightmove’s 25-year history and the most significant month-on-month rise since June 2015.
Rightmove attributed the market resurgence to Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled previous uncertainties that had dampened market activity. Despite the positive momentum, Rightmove cautioned prospective sellers about the challenging market conditions. The number of homes for sale is currently 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 the market described as “volatile.” While most areas saw price increases, the East Midlands and Scotland saw declines.
Buyer demand surged in the two weeks following Christmas Day, with a 57% increase 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, following significant rate cuts by major lenders at the end of 2025 and the beginning of this year.
Colleen Babcock, a property expert at Rightmove, emphasized the importance of sellers setting realistic asking prices to attract buyers in the current market. While there has been a positive trend in seller confidence, sellers are advised to heed their agents’ guidance and avoid overpricing. Myles Moloney, director at Chase Buchanan estate agents in London, noted a busy market with increased interest in family homes that offer modern living spaces. The market is witnessing a surge in family home buyers making early moves in 2026 to take advantage of current affordability and market conditions.
Overall, the market is dynamic and evolving, with both sellers and buyers navigating changing conditions to achieve their property goals.