The housing market has kicked off the new year with a strong surge following a significant rise in prices. According to property platform Rightmove, the average home price has increased by nearly £9,900 to reach £368,031 since December. This 2.8% jump represents the largest January increase in Rightmove’s 25-year history and the most substantial month-on-month rise since June 2015.
Rightmove attributed this market rebound to Chancellor Rachel Reeves’ Budget announcement at the end of November. Prior to this, rumors and uncertainty had subdued market activity. Despite the positive momentum, Rightmove cautioned potential sellers about the challenging market conditions. The current number of homes available for sale is the highest for this time of year since 2014, with a third of listed properties experiencing price reductions. Market volatility is evident, with regions like the East Midlands and Scotland witnessing price declines while most areas saw price increases this month.
Buyer demand has surged post-Christmas, with inquiries to agents about available homes rising by 57% and new listings increasing by 81% compared to the preceding two weeks. The market has been supported by decreasing mortgage rates, as major lenders made notable rate cuts at the close of 2025 and the beginning of this year.
Colleen Babcock, a property expert at Rightmove, expressed optimism about the increased seller confidence in setting higher prices. However, she advised sellers to heed their agents’ guidance to avoid overpricing. With a considerable inventory of homes for sale, sellers are urged to be realistic in pricing to attract buyers effectively.
Myles Moloney, director at Chase Buchanan estate agents in London, noted a busy market with homes aligning well with current buyer preferences. Properties featuring strong schooling options and spacious open-plan living areas are in high demand. Moloney highlighted the importance of well-presented homes priced sensibly that cater to modern family living as key factors attracting buyer attention.
Overall, the housing market’s positive start to the year reflects a balance between increased seller confidence and a cautious approach to pricing amidst a competitive and fluctuating market landscape.