The UK property market has kicked off 2026 with a significant surge, as the average asking price for a home jumped by nearly £10,000 in January. This marks the most substantial monthly increase recorded in a decade.
Record January Price Rise
According to the latest data from property portal Rightmove, the average price tag on a home increased by 2.8% or £9,893 in January 2026. This is the most significant rise for the month of January in the company's 25-year history of tracking house prices and the largest monthly jump overall since June 2015.
This recovery has pushed the national average asking price to £368,031, bringing it close to the levels seen in August 2025. Market sentiment appears to have rebounded following uncertainty in the lead-up to last autumn's budget.
Seller Confidence Meets Buyer Choice
Colleen Babcock, a property expert at Rightmove, described it as an encouraging start to the year. "Sellers are feeling confident enough to list their homes at higher prices after several months of muted growth," she said. This confidence coincides with more potential buyers returning to the market.
However, Babcock issued a note of caution for sellers. "Sellers would do well to listen to the guidance of their agent," she advised, warning against over-optimism. She pointed out that there is a 12-year high number of homes for sale for this time of year, giving buyers significant choice. Furthermore, a third of properties already on the market have undergone a price reduction.
"This means sellers need to be realistic and balance the price they want with the likelihood of finding a buyer in their local market at that price," Babcock concluded.
Mortgage Outlook and Market Activity
Rightmove also reported a record number of visits to its website on Boxing Day, setting the tone for a bounce in activity after the festive period. Many buyers have seen their affordability improve, with average wage rises outstripping property price growth in recent times.
Matt Smith, a mortgage expert at Rightmove, provided insight on borrowing costs. He stated that mortgage rates are "likely to be steady for the next few months, with only minor changes up or down." He added a pointed message for those waiting on the sidelines: "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."
Myles Moloney, director at Chase Buchanan Estate Agents in London, highlighted what sells in the current climate. "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," he said.
Rental Market Shows Divergent Trend
In a contrasting trend for the lettings market, a separate report from Hamptons found that newly agreed rents dipped slightly at the end of 2025. Aneisha Beveridge, head of research at Hamptons, noted that while 2025 looked positive for tenants on paper, with more choice and slightly lower rents, the driving factors were complex.
"Falling rents were driven more by strong first-time buyer numbers and wider economic weakness than by improved tenant affordability," Beveridge explained. She also observed a shift in behaviour, with fewer new entrants to the rental market, as many are staying at home longer or are reluctant to commit to the high cost of renting.
