The UK property market has made a record-breaking start to 2026, with the average price of a home coming to market rising by 2.8% in January. According to the latest data from Rightmove, average asking prices jumped by £9,893 this month, taking the national average to £368,031. This represents the biggest January increase since Rightmove began reporting 25 years ago and the sharpest monthly rise since June 2015. The surge suggests a strong rebound in seller confidence following a period of uncertainty surrounding the Autumn Budget in late 2025.
Why are house prices rising?
The sharp increase is being driven by pent-up demand. It is likely that many sellers who held off listing their homes towards the end of 2025, largely due to speculation surrounding the Autumn Budget, have returned to the market. Rightmove reported that buyer demand rose by 57% in the two weeks following Christmas, and this "Boxing Day bounce" was seemingly matched by sellers, with the number of new homes listed for sale jumping by 81% over the same period.
Colleen Babcock, a property expert at Rightmove, said "It’s an encouraging start to the year to see sellers confident enough to list their homes at higher prices after several months of muted price growth last year, coinciding with more potential buyers returning to market. 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".
Is the market fully recovered?
While the headline figures are positive, experts warn that the market is still price-sensitive. Although asking prices have risen, they are only 0.5% higher than they were a year ago, effectively returning to levels seen in August 2025. Additionally, the recovery is not uniform across the UK; while most regions have seen price growth, the East Midlands and Scotland bucked the trend, recording slight falls in average asking prices. This reinforces the importance of researching your specific local market rather than relying solely on national averages.
The data also highlights that while optimism is high, sellers must remain realistic. Competition is fierce, with the number of available homes for sale at its highest level for this time of year since 2014.
Key figures from the report include:
- Average Asking Price - £368,031 (up 2.8% on last month)
- Year-on-Year Change - Prices are 0.5% higher than in January 2025.
- Price Reductions - Around one-third of properties currently on the market have had their asking price reduced, signalling that overpriced homes are still struggling to sell.
What does this mean for buyers and sellers?
Sellers
For sellers, the record jump indicates that now may be a good time to list your property, given high buyer activity. However, with listing numbers also up, pricing your home competitively is crucial to standing out.
Buyers
For buyers, the increase in new listings means more choice, but the jump in asking prices could stretch affordability. It is worth remembering that the "asking price" is the price a seller hopes to achieve, not necessarily the final sold price. In a competitive market, buyers may still be able to negotiate, especially on properties that have been listed for a while.
"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 twelve-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" - Colleen Babcock, Rightmove.
Latest mortgage rates and affordability
Housing market activity is also supported by a more stable mortgage landscape compared to previous years. With the Bank of England's base rate expected to continue its downward trend through 2026, mortgage rates have become more palatable for many movers. However, rates remain higher than the historic lows of the early 2020s. We provide an up-to-date commentary on where interest rates are heading in our article 'Will interest rates continue to fall in 2026?'. If you are looking to buy, it is vital to check your affordability before you start viewing properties. You can use our mortgage rate comparison tool to see what deals are currently available to you.
Alternatively, consider speaking to an independent mortgage broker who can provide a comprehensive view of the market. They will be able to match a mortgage to your specific needs and access exclusive deals not available directly. A mortgage broker can also refine your application to target lenders most likely to approve your application, saving you valuable time. While some brokers charge a fee, many offer their services fee-free. You can obtain a free mortgage review in 30 seconds* from a vetted FCA-regulated mortgage professional.
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