The housing market has seen a strong start to the year following 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% spike represents the largest January increase in Rightmove’s 25-year history and the biggest month-on-month rise since June 2015.
Rightmove attributed this market rebound to the impact of Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled prior rumors and uncertainties that had dampened market activity. However, the company cautioned prospective sellers that the market conditions remained challenging. 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 significantly nationwide, with the market showing volatility. Despite most regions experiencing price increases, the East Midlands and Scotland saw declines.
Buyer demand surged post-Christmas, with a 57% increase in inquiries to agents and an 81% rise in newly listed homes for sale compared to the preceding two weeks. This demand has been supported by decreasing mortgage rates, as major lenders made notable rate cuts towards the end of 2025 and the start of this year.
Colleen Babcock, a property expert at Rightmove, expressed optimism at the increased seller confidence in setting higher prices following a period of subdued growth. She emphasized the importance for sellers to set realistic asking prices amidst a market with a high inventory of homes for sale and many properties experiencing price reductions. Myles Moloney, director at Chase Buchanan estate agents in London, noted the active market and highlighted the appeal of properties meeting current buyer preferences, such as those with strong schooling options and spacious, modern living areas.
The market has seen a surge in family home buyers at the beginning of this year, with many eager to make their next move promptly rather than waiting for the traditional spring market. Improved affordability due to mortgage rate cuts has also played a role in stimulating buyer activity. Well-presented homes priced sensibly and designed for modern family living are attracting heightened attention in the current market landscape.