The real estate market has kicked off the year with a strong uptick following a significant surge in prices. The average home price has increased by nearly £9,900 to reach £368,031 since December, as reported by property platform Rightmove. This 2.8% rise represents the largest January increase in Rightmove’s 25-year history and the most substantial month-on-month growth since June 2015.
Rightmove attributes this market rebound to Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled prior rumors and uncertainties that had been hindering activity. However, despite the positive momentum, Rightmove cautions potential sellers that the market remains challenging. The current inventory of homes for sale is the highest for this time of year since 2014, with one-third of listed properties experiencing price reductions. Geographically, market conditions vary significantly, with volatility observed across regions. While most areas saw price increases, the East Midlands and Scotland saw declines.
Demand in the market surged post-Christmas, with a 57% increase in buyer inquiries and an 81% rise in newly listed properties compared to the preceding two weeks. This heightened demand has been supported by declining mortgage rates, with major lenders implementing notable 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 properties at higher prices, reflecting increased buyer interest. Babcock advised sellers to be realistic in setting asking prices, considering the abundance of listings and the prevalence of price reductions. Myles Moloney, director at Chase Buchanan estate agents in London, noted the market’s busy nature, highlighting the appeal of homes meeting current buyer preferences, such as those with strong schooling options and spacious, modern living areas.
Buyers, particularly families seeking their second or third home, are driving early activity in 2026, attracted by well-presented and reasonably priced properties conducive to contemporary family living. The combination of improved affordability due to mortgage rate cuts and well-suited properties is garnering heightened attention from buyers in the current market landscape.