The UK property market has kicked off 2026 with a powerful surge, recording its most significant January price increase in a quarter of a century. New data reveals a dramatic uplift in seller confidence, pushing average asking prices close to their peak levels from last summer.
A Record-Breaking Start to the Year
According to the latest study from property portal Rightmove, the average asking price for a home in the United Kingdom climbed by a substantial 2.8 per cent during January 2026. This jump equates to a cash increase of nearly £10,000, pushing the typical price tag to £368,031.
This monthly rise is not just strong for the time of year; it marks a historic moment. It represents the largest monthly increase Rightmove has recorded for any January in its 25 years of tracking house prices. Furthermore, it is the biggest single-month leap the market has seen since way back in June 2015.
Renewed Confidence and Mortgage Rate Cuts Fuel Recovery
The driving forces behind this sharp recovery are twofold. Analysts point to renewed confidence among sellers, who are now entering the market in greater numbers. This is coupled with a noticeable return of buyers, a trend partly stimulated by recent cuts to mortgage interest rates.
The combined effect has been so pronounced that it has almost erased the price dips seen in the latter part of 2025. The current average asking price is now very close to the market's high point recorded in August of last year.
A Word of Caution for Sellers Amid High Stock Levels
Despite the bullish headline figures, Rightmove has issued clear advice to those looking to sell. The property expert urges vendors to be realistic with their initial pricing. The reason for this caution is a significant counterbalance in the market: supply.
The number of homes available for sale is currently at a 12-year high for this season. This abundance of choice means buyers are in a strong position to be selective, and overpriced properties are likely to be overlooked in favour of competitively marketed homes.
In a separate development within the housing sector, a report from estate agency Hamptons has highlighted a shift in the rental market. Their data shows that newly agreed rents across Britain experienced an average dip of 0.7 per cent over the course of 2025.
This may seem a modest decline, but it is historically significant. It marks the first annual fall in rents since Hamptons' records began in 2011. The average monthly rent paid by tenants at the end of the period stood at £1,371.
