The real estate market has kicked off the year with a strong start following a significant rise in property prices. According to data from property website Rightmove, the average home price has increased by nearly £9,900 to £368,031 since December. This 2.8% surge represents the largest January increase in Rightmove’s 25-year history of reporting and the most considerable month-on-month rise since June 2015.
Rightmove attributed the market’s rebound to Chancellor Rachel Reeves’ Budget announcement at the end of November, which dispelled previous rumors and uncertainties that had dampened market activity. Despite the positive momentum, Rightmove cautioned potential sellers that the market conditions remain challenging. The number of homes available for sale is at its highest level for this time of year since 2014, with a third of listed properties experiencing price reductions. Regional variations persist, with the market showing volatility. While most regions saw price increases, the East Midlands and Scotland saw declines.
Buyer demand surged in the weeks after Christmas Day, with a 57% increase in inquiries to agents about available properties and an 81% rise in newly listed homes compared to the preceding two weeks. This increased demand has been supported by decreasing mortgage rates, with major lenders announcing cuts at the end of 2025 and the beginning of 2026.
Colleen Babcock, a property expert at Rightmove, noted the positive start to the year with sellers pricing their homes higher after a period of modest growth last year. However, sellers are advised to heed their agent’s guidance when setting prices to avoid over-optimism. With an elevated number of homes for sale and a significant portion seeing price reductions, sellers are urged to be realistic to attract buyers in their local market.
Myles Moloney, director at Chase Buchanan estate agents in London, highlighted the bustling market activity, particularly noting the appeal of homes meeting current buyer preferences. He emphasized the importance of factors like strong schooling and modern living spaces in attracting buyers. The market has also seen increased interest from families looking to make their next move early in the year, driven by improved affordability due to mortgage rate cuts.
In conclusion, the real estate market has shown resilience and activity at the start of the year, with sellers cautiously optimistic and buyers benefiting from a wide selection of properties and favorable mortgage conditions.