The housing market has kicked off the new year with a strong surge following a significant increase in prices. According to Rightmove, the average home price has risen by nearly £9,900 to £368,031 since December. This 2.8% jump represents the largest January increase in Rightmove’s 25-year history, as well as the biggest month-on-month rise since June 2015.
Rightmove attributed this market rebound to Chancellor Rachel Reeves’ Budget announcement in late November, which dispelled previous rumors and uncertainties that had subdued market activity. Despite the positive momentum, Rightmove cautioned potential sellers about the challenging market conditions. The inventory 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. Geographic variations also play a role, with regions like the East Midlands and Scotland seeing price declines while most areas saw increases.
Buyer demand surged post-Christmas, with a notable 57% increase in inquiries to agents and an 81% rise in newly listed homes for sale. This heightened demand has been supported by decreasing mortgage rates, with major lenders implementing significant rate cuts at the end of 2025 and the start of 2026.
Colleen Babcock, a property expert at Rightmove, emphasized the importance of realistic pricing for sellers amid the current market dynamics. While the increase in seller confidence is positive, Babcock advised sellers to heed their agents’ guidance when setting prices and to avoid overpricing. With a surplus of homes on the market and a considerable number of price reductions, sellers are urged to strike a balance between desired prices and market realities.
Myles Moloney, director at Chase Buchanan estate agents in London, noted the busy market environment and highlighted the appeal of homes meeting current buyer preferences, such as those with strong school access and spacious, modern living areas. Moloney cited an example of a highly viewed listing on Rightmove, emphasizing the importance of well-presented, reasonably priced homes tailored to modern family needs in attracting buyer interest.