The housing market has kicked off the new year with a strong surge following a remarkable increase in prices. According to data from property website Rightmove, the average home price has risen 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 of reporting and the most significant month-on-month growth since June 2015.
Rightmove attributed this market rebound to Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled prior uncertainty and rumors that had been dampening activity. However, the company cautioned potential sellers that market conditions remain challenging. Rightmove noted that 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 widely across regions, with the East Midlands and Scotland experiencing price declines despite overall national increases.
Buyer demand has seen a notable uptick, with a 57% surge in inquiries to agents about available homes and an 81% increase in newly listed properties after the holiday season. This increased demand has been supported by declining mortgage rates, with major lenders implementing significant rate cuts at the end of 2025 and the beginning of this year.
Colleen Babcock, a property expert at Rightmove, expressed optimism about sellers listing their homes at higher prices, indicating a return of confidence among buyers. However, she advised sellers to heed their agents’ guidance when setting prices and to avoid overly optimistic valuations. With a high number of homes on the market, sellers are encouraged to be realistic to attract buyers effectively.
Myles Moloney, director at Chase Buchanan estate agents in London, highlighted the current bustling market activity, emphasizing the appeal of homes meeting buyers’ specific criteria, such as open-plan living spaces and proximity to quality schools. Moloney noted increased interest from families seeking their second or third home, with many eager to make early moves in 2026 rather than waiting for the traditional spring market. Improved affordability through mortgage rate cuts has also played a role in driving buyer interest towards well-presented, sensibly priced homes suitable for modern family living.