Property Market Update: Historic January Surge
Our latest property market update reveals a record-breaking rise in asking prices to start 2026 with unexpected vigour. Following a period of uncertainty late last year, new data suggests that confidence has flooded back into the sector, driven by a surge in post-Christmas buyer activity and a stabilising mortgage landscape.
According to the latest figures released by property portal Rightmove, the market is witnessing its most significant start to a new year in decades. However, experts advise caution even though market optimism is high. Sellers must therefore remain realistic about stock levels to secure sales.
Property Market Update: Historic Price Rebound
The headline figures for January are startling. The average price of a property coming to market has climbed by 2.8% this month alone. In monetary terms, this represents a £9,893 increase, pushing the national average asking price to £368,031.
Rightmove confirmed that this is the largest January rise they have ever recorded since their House Price Index began reporting 25 years ago. Furthermore, it represents the sharpest month-on-month jump seen at any time of the year since June 2015.
This resurgence appears to be a direct correction following the sluggish end to 2025. During the latter half of last year, price growth was muted, largely attributed to market jitters surrounding the government’s Budget. With those fiscal announcements now in the rear-view mirror, the “wait and see” approach adopted by many movers has seemingly evaporated. National average asking prices are now 0.5% higher than they were at this point last year, signalling a robust rebound in sentiment.
The ‘Boxing Day Boom’ Phenomenon
The catalyst for this price hike appears to be a frantic release of pent-up demand immediately following the festive period. The trend of browsing for homes during the holidays reached new heights, with Rightmove reporting its busiest ever Boxing Day for platform visits.
The data for the fortnight immediately following Christmas Day underscores this shift in momentum:
- Buyer Demand: Rose by 57% compared to the two weeks preceding Christmas.
- New Listings: The number of sellers placing homes on the market jumped by 81%.
Colleen Babcock, a property expert at Rightmove, noted that the statistics point towards an encouraging start to 2026. The correlation between sellers feeling confident enough to hike prices and a wave of buyers returning to the market suggests the spring selling season has effectively arrived early.
The Supply-Side Challenge: A Buyer’s Market?
While the price surge is good news for sellers on paper, the underlying dynamics of the market tell a more complex story. Despite rising prices, the market is heavily saturated with stock.
The number of homes currently available for sale is at its highest level for this time of year since 2014. This creates a unique “two-speed” market: while optimism is driving asking prices up, the sheer volume of choice available to buyers means competition among sellers is fierce.
Rightmove’s report highlights a critical statistic for overly ambitious vendors: approximately one-third of properties currently on the market have already undergone a price reduction.
This abundance of supply effectively keeps a lid on runaway inflation. Experts warn that while seller confidence is a positive sign, it must be tempered with realism. With a twelve-year high in housing inventory, buyers are in a position to be choosy. Estate agents warn that overpricing in this competitive market often causes stagnation. Therefore, they urge sellers to trust professional guidance on valuations.
Regional Variations
The picture is not entirely uniform across the United Kingdom. While the national trend is upward, regional volatility remains. Notably, both Scotland and the East Midlands bucked the national trend, recording price falls this month. This disparity highlights the importance of local knowledge, as micro-markets continue to operate at different speeds depending on local economic factors and inventory levels.
Property Market Update: Rates Improving
A significant driver of this renewed market confidence is the improving picture regarding affordability. After the volatility experienced in recent years, the mortgage market has settled, providing much-needed stability for prospective borrowers.
Rightmove’s daily mortgage tracker indicates that the average rate for a two-year fixed mortgage has dropped to 4.29%. This is the lowest average seen since before the disruptive “mini-Budget” of September 2022. For comparison, at this time last year, the average rate stood at 5.03%.
For those with substantial equity or savings, the deals are even more attractive, with the lowest available two-year fixed rates for high-deposit buyers sitting at 3.47%.
What This Means for Monthly Payments
The tangible impact of these rate cuts is significant. Buyers purchasing an average home with a 20% deposit now enjoy reduced costs. Consequently, they save over £100 per month compared to the previous year.
When combined with average wage growth, which is currently outstripping property price growth, the “affordability gap” is slowly narrowing. This financial relief is likely the key factor unlocking moves that were previously put on hold in 2025.
Outlook for the Spring Season
Rightmove’s Matt Smith notes that falling rates have certainly aided the market. However, he warns borrowers not to expect rates to plummet indefinitely. The consensus is that rates will likely remain steady in the short term, hovering around current levels with only minor fluctuations.
Smith notes that for those waiting for the “perfect” time to secure a mortgage, the current window offers some of the most competitive deals seen in years.
As the UK heads towards the traditional spring buying season, the market appears to be in a healthy, albeit competitive, position. Record January asking prices signal that the British property obsession is alive and well. However, heavy housing supply currently keeps power balanced between buyers and sellers.
