The real estate market has kicked off the year with a strong start following a remarkable surge in property prices. According to data from Rightmove, the average home price has risen by nearly £9,900 to reach £368,031 since December. This 2.8% increase represents the largest January jump in the 25-year history of Rightmove’s reporting and the most significant month-on-month rise since June 2015.
Rightmove attributed the market 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 prospective sellers that the market remains challenging. 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. Market conditions vary across regions, with some areas experiencing price declines, such as the East Midlands and Scotland.
Buyer demand surged in the weeks following Christmas, with a 57% increase in inquiries to agents and an 81% rise in newly listed properties for sale. 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, highlighted the positive start to the year as sellers show confidence in listing their properties at higher prices. However, she advised sellers to heed their agents’ guidance when setting asking prices to avoid overpricing in a market with abundant choices and a significant number of properties already reduced in price.
Myles Moloney, director at Chase Buchanan estate agents in London, noted the busy market environment and emphasized the importance of well-presented homes that cater to modern family living preferences. Properties with features like open-plan kitchens and good schooling options are particularly attractive to buyers, with many families actively seeking their next home early in the year rather than waiting for the traditional spring market.
Overall, the real estate market is witnessing increased activity and interest from buyers, driven by a combination of market confidence, favorable mortgage rates, and evolving buyer preferences.