UK Property Market Sees Strong Start to the New Year
The UK property market has started the new year on a positive note, with home prices rising sharply. New data shows that the average asking price of a home coming onto the market has increased by almost £10,000 in just over a month. This is the biggest monthly price rise seen in the last ten years.
According to property website Rightmove, the average asking price of a home in the UK rose by £9,893 over five weeks. This increase suggests that confidence is returning to the housing market after a slow period at the end of last year.
Rightmove said much of this price rise is due to renewed optimism. In recent months, many buyers and sellers had delayed their plans because of worries about possible changes to property taxes in the government’s November budget. These fears caused activity in the housing market to slow, as people preferred to wait and see what would happen.
When the budget was finally announced, the tax changes were less severe than many had expected. This brought relief to both homeowners and buyers. As a result, people began returning to the market with more confidence.
The housing market also received a boost when the Bank of England cut interest rates a few days before Christmas. Lower interest rates mean cheaper mortgages, which makes buying a home more affordable and encourages more people to take action.
Rightmove’s data shows that the average asking price for newly listed homes rose by 2.8% compared with the previous month. This pushed the typical asking price to £368,031. Rightmove said this was the biggest rise ever recorded for the month of January in the last 25 years, and the largest monthly increase overall since June 2015.
The data is based on tens of thousands of homes put up for sale by estate agents between 7 December and 10 January. It presents a more positive picture than recent reports from major mortgage lenders. Halifax and Nationwide both reported that house prices fell in December, by 0.6% and 0.4% respectively.
One reason for this difference is that Rightmove tracks asking prices, not the final prices homes are sold for. However, property experts say the figures still show that activity in the market is increasing.
Jeremy Leaf, a north London estate agent and former residential chair of the Royal Institution of Chartered Surveyors (RICS), said that even though asking prices do not always reflect selling prices, the overall trend is clear.
He said activity is rising, helped by falling mortgage rates and lower inflation. He also noted that buyers and sellers felt relieved when the budget did not introduce the harsh property tax changes many feared.
Before the budget announcement on 26 November, there was intense speculation about what the government might do. Some people worried about changes to stamp duty, which is a tax paid when buying a home. TV presenter Kirstie Allsopp said at the time that many people were panicking and choosing to stay put rather than buy or sell.
In the end, the main new policy affecting property was a “mansion tax”. This is an extra council tax charge for homes in England worth more than £2 million. Since this tax affects only a small number of properties, most buyers and sellers were relieved.
Rightmove said activity picked up strongly after Christmas. In the two weeks following the holiday period, buyer demand rose by 57% compared with the two weeks before Christmas. At the same time, the number of new homes coming onto the market increased by 81%.
This rise in demand and supply suggests that many people who paused their plans late last year are now ready to move forward.
While higher prices are good news for homeowners, they are less welcome for first-time buyers. Many people trying to buy their first home already face high prices and tough affordability challenges. Rising asking prices make it even harder for them to get on the property ladder.
However, Colleen Babcock, a property expert at Rightmove, said the situation should be seen in context. She explained that asking prices have only returned to the levels seen in the summer of 2025, before budget rumours caused uncertainty in the market.
She also pointed out that price changes vary widely across different parts of the country. Some regions have seen stronger growth than others.
For example, the east of England recorded above-average price rises, with asking prices up by 3% compared with the previous month. In contrast, some areas went against the national trend. The East Midlands saw prices fall by 0.6%, while Scotland recorded a smaller drop of 0.4%.
Meanwhile, separate data from estate agent Hamptons showed a different trend in the rental market. According to Hamptons, average private rents in Great Britain ended 2025 lower than where they began. This is the first time this has happened in many years.
The average rent for a newly let property fell by 0.7% over the year. This was the first annual fall in rents since Hamptons began keeping records in 2011.
As a result, the average tenant moving into a new rental property now pays £1,371 per month. This is £10 less per month than they would have paid a year earlier.
Overall, the data suggests that while house prices are rising again, the market is stabilising after a period of uncertainty. Confidence is slowly returning, supported by lower interest rates and clearer government policy, even as challenges remain for first-time buyers.
Published: 20th January 2026
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