January 2026 has delivered the strongest start to a property year on record, with average asking prices jumping to £368,031 – a 2.8% increase (£9,893) from December 2025. This marks the largest January increase ever recorded and the biggest monthly rise since June 2015, according to Rightmove’s latest House Price Index.
Post-Budget Market Recovery
The surge represents a notable recovery from the uncertainty that gripped the market following November’s Budget announcement. Asking prices have now returned to levels last seen in August 2025, before Budget speculation unsettled buyer and seller confidence. National property prices now sit 0.5% higher than January 2025.
The recovery is underpinned by exceptional buyer activity. Rightmove recorded its busiest-ever Boxing Day, with platform visits jumping 93% compared to Christmas Day. In the five days following Christmas, buyer enquiries rose 67% compared to the five days before, whilst new listings increased by 143%.
Regional Variance Tells a Different Story
Despite the headline surge, regional performance varies significantly:
- North East leads with 3.4% annual growth, boosted by a 7.0% monthly increase
- London shows strength at 0.9% annual growth, driven by a 2.8% monthly jump
- South East and East of England continue to struggle, with annual declines of -1.6% and -0.3% respectively
- Scotland posts 1.7% annual growth despite a -0.4% monthly decrease
This north-south divide reflects ongoing affordability challenges in southern regions, where prices remain elevated relative to local incomes.
Market Reality: High Supply Meets Strong Demand
Whilst seller confidence appears high, the market reality is more nuanced. The number of homes listed for sale in January 2026 is the highest for this time of year since 2014. More tellingly, around a third of existing properties on the market have already reduced their asking prices.
This creates a buyer’s market in terms of choice, even as headline prices rise. Industry experts caution sellers against overpricing, emphasising the importance of realistic pricing strategies to convert enquiries into sales.
Mortgage Rate Improvements Support Buyers
Improved mortgage affordability is a key driver of renewed buyer activity. The average two-year fixed mortgage rate in January 2026 stands at 4.29%, down from 5.03% at the same time last year. The most competitive two-year fixed rates for buyers with larger deposits have fallen to 3.47% – the lowest since September 2022.
For a buyer purchasing at the national average asking price with a 20% deposit, this translates to savings of over £100 per month compared to January 2025, though actual savings depend on individual circumstances and lender criteria.
What This Means for Buyers in 2026
For prospective buyers, particularly first-time buyers, the key question is timing. Whilst asking prices have recovered to summer 2025 levels, they remain below the peaks seen in 2022. The combination of increased housing stock, falling mortgage rates, and realistic pricing from motivated sellers creates opportunities – but only for buyers who act decisively.
Market experts suggest that the current rate environment may represent the best mortgage deals available for several months, with the Bank of England expected to hold rates steady in February before potential further cuts in Q2 2026.
The strong start to 2026 indicates renewed confidence, but whether this momentum carries through to the crucial spring selling season remains to be seen. For buyers with deposits ready and affordability in place, the current market offers both choice and improving borrowing conditions.
