The housing market has kicked off the new year on a positive note with 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 is the largest January increase in Rightmove’s 25-year history and the most substantial month-on-month rise since June 2015.
Rightmove attributes the market’s resurgence to Chancellor Rachel Reeves’ Budget announcement in late November, following a period of speculation and uncertainty that impacted market activity negatively.
Despite the uptrend, Rightmove cautioned prospective sellers about the challenging market conditions. 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. Regional variations are significant, with market volatility observed across the country. While most regions saw price increases, the East Midlands and Scotland reported price declines.
Buyer demand surged in the two weeks post-Christmas, with a 57% increase in inquiries to agents about homes for sale and an 81% rise in newly listed properties compared to the preceding two weeks. This heightened demand has been supported by decreasing mortgage rates, with major lenders announcing significant rate cuts at the end of 2025 and the beginning of this year.
Colleen Babcock, a property expert at Rightmove, noted the positive start to the year with sellers listing their homes at higher prices. However, she advised sellers to heed their agents’ guidance when setting prices and avoid overpricing. With an increased number of homes for sale and many properties facing price reductions, sellers are urged to be realistic in their pricing strategies.
Myles Moloney, director at Chase Buchanan estate agents in London, highlighted the active market, particularly for homes meeting current buyer preferences. He emphasized the importance of factors like good schooling and spacious living areas in attracting buyers. Moloney cited an example of a highly viewed property on Rightmove on Boxing Day that exemplified the features currently in demand.
The market is witnessing increased activity from families seeking modern, well-priced homes, driven by early-year momentum and improved affordability due to mortgage rate cuts. Homes that are attractively presented and cater to contemporary family living needs are garnering the most attention in the current market.
