Asking prices recorded their biggest ever January jump as buyer confidence snapped back after the Budget according to new data from Rightmove.
The average asking price of homes coming to market rose by 2.8% in January, an increase of £9,893, taking the national average to £368,031.
It is the largest January rise in Rightmove’s 25-year index and the biggest month-on-month increase since June 2015.
Prices are now 0.5% higher than a year ago, reversing a subdued end to 2025 when asking prices underperformed long-term averages in eight of the previous 12 months.
IMPROVING SENTIMENT
The rebound comes as market sentiment improved following uncertainty around November’s Budget.
However, Rightmove warns that sellers face intense competition. The number of homes available for sale is at its highest level for this time of year since 2014, while around 33% of existing listings have already seen price reductions.
The surge in prices coincided with a sharp post-Christmas bounce in activity. In the two weeks after Christmas Day, buyer demand rose by 57% compared with the two weeks before, while the number of newly listed homes jumped by 81%. Rightmove also recorded its busiest ever Boxing Day for visits to its platform.
Activity has since eased from the stamp-duty-fuelled surge seen at the start of 2025, but buyer demand is broadly in line with 2024 levels, suggesting a steadier start to the year.
SELLER CONFIDENCE UP
Colleen Babcock (main picture, inset), Property Expert at Rightmove, says: “Some buyers, particularly first-time buyers, won’t want to see prices rising too quickly. However, asking prices are only back to where they were in the summer of 2025 before the Budget rumours began surfacing, which unsettled the market and dented confidence.
“Sellers would do well to listen to the guidance of their agent.”
“This new year seller confidence is a good sign but sellers would do well to listen to the guidance of their agent when setting their asking price and avoid being over-optimistic.
“There’s a 12-year high number of homes for sale for this time of year, so buyers have lots of choice, and a third of properties that were already on the market for sale have had a price reduction.
“This means that sellers need to be realistic and balance the price they want to achieve with the likelihood of being able to find a buyer in their local market at that price.”
MORTGAGE CONDITIONS BETTER
Mortgage conditions have also improved. Rightmove’s data shows the average 2-year fixed mortgage rate has fallen to 4.29%, down from 5.03% a year ago and its lowest level since before the September 2022 mini-Budget. The cheapest available 2-year fixed rate for buyers with larger deposits is now 3.47%.
The fall in rates means a buyer purchasing at the national average asking price with a 20% deposit would pay more than £100 a month less than a year ago.
RECORD NUMBERS
Babcock adds: “It’s early days but there are encouraging signs that more home-movers are now planning a 2026 move as we head towards the important Spring buying and selling season.
“A record number of visits to Rightmove on Boxing Day and a big bounce in activity following a quieter festive period have set the tone for a positive start to the year.
“Many buyers have seen their affordability improve with average wage rises outstripping average property prices.
“Mortgage rate cuts at the end of 2025 and beginning of 2026 will also support those who are looking to move and come as some very good news at the start of the year, with a typical home-mover seeing their affordability improved by around £100 a month.”
SLOW PROGRESS
Matt Smith, Rightmove’s Mortgage Expert, says lenders had cut rates further to capture early-year demand but warns that progress may slow.
He adds: “We’ve seen some further rate cuts from lenders at the start of the year as they look to secure the business of those making an early 2026 move.
“Mortgage rates have slowly but surely been coming down, to the extent that the average rate a typical home-buyer is likely to see is now the lowest since before the disruptive 2022 mini-Budget.
“However, the financial markets are currently expecting no more rate cuts until the second quarter of the year, with the Bank of England Base Rate likely to be held during the next rate decision in February.
“Mortgage rates are therefore likely to be steady for the next few months, with only minor changes up or down. Those who have been waiting for cheaper mortgage rates before acting might currently be seeing some of the best deals that will be around for a while.”
INDUSTRY REACTION
Myles Moloney, Director at Chase Buchanan Estate Agents in London, says: “The market has been very busy, and the types of homes we’re seeing become available for sale are perfectly positioned to take advantage of what buyers are looking for right now.
“Strong schooling is a huge driver in our area and growing families want a large open plan kitchen and living space.
“We had a listing which fit these exact criteria and was one of the most viewed on Rightmove on Boxing Day. It was the kind of home that naturally stands out when activity spikes.
“We have also seen a big uplift at the start of this year in family home buyers who are moving for the second or third time.
“Many are keen to push on early in 2026 and secure their next step rather than wait for the spring market.
“Improving affordability through mortgage rate cuts are helping. Homes that are well presented, priced sensibly, and set up for modern family living are the ones cutting through and attracting the highest levels of attention.”
IMPROVED CLARITY
Meanwhile, estate agency Chestertons does not expect property prices to move more than low single digits across London or the UK in 2026 but believes that improved clarity from the Autumn Budget will release some of the pent-up demand from those who didn’t have the confidence to move in the second half of 2025.
This should prompt increased transaction levels in the first few months of the year, which could in turn start exerting upward pressure on prices.
SIGH OF RELIEF
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “Buyers and sellers breathed a collective sigh of relief when tax changes in the Budget turned out to be not as punitive as many expected.
“Although the Rightmove survey looks at asking, rather than selling, prices of newly-listed homes, activity is definitely ‘on the up’ buoyed by falling mortgage rates and inflation.
“However, sellers should be careful not to get too carried away. The amount of new and existing stock – especially flats – as well as underlying worries about employment prospects, are keeping a lid on what buyers are prepared to pay.”
BOUYANT MOOD
Tomer Aboody, Director of specialist lender MT Finance, says: “Whether we are seeing a new year bounce or whether the reduction in base rate at the end of last year is behind it, there is a buoyant mood in the housing market with good activity from buyers and sellers alike.
“However, with more stock soon to come to the market, this will surely keep prices in check.
“With the prospect of further rate reductions, we are hoping to see increased activity in the form of more transactions as the year pans out. Lower mortgage rates may not be enough though – encouragement from the government in the form of another stamp duty concession or reform may be required to boost activity in a meaningful way.”
CONFIDENCE RETURNS
James Nightingall of HomeFinder AI says: “January is seeing an evident return in buyer and seller confidence.
“Just after Christmas house hunters started carrying out more online searches whilst sellers chose this period to put their property on the market.
“This uplift in activity has continued into the new year, resulting in more viewings and offers being made.”
