UK house asking prices posted their strongest ever January rise as buyer confidence rebounded after the Budget according to new figures from Rightmove.
The average asking price of homes coming to market increased by 2.8% in January, up £9,893 to £368,031. This marks the largest January increase in Rightmove’s 25-year House Price Index and the biggest month-on-month rise since June 2015.
National average prices are now 0.5% higher than a year ago, following a subdued end to 2025 when prices underperformed historical norms in eight of the previous 12 months. The uplift reflects a recovery in sentiment after uncertainty linked to November’s Budget.
However, competition between sellers remains intense. The number of homes available for sale is at its highest level for this time of year since 2014, and around 33% of properties already on the market have had their asking price reduced.
BOXING DAY BOOST
The price rebound has been supported by a sharp post-Christmas rise in activity. In the two weeks after Christmas Day, buyer demand increased by 57% compared with the two weeks before, while the number of newly listed homes jumped by 81%. Rightmove also recorded its busiest ever Boxing Day for platform visits.
Buyer demand has eased from the stamp-duty-driven spike seen at the start of 2025 but is broadly in line with 2024 levels, pointing to a steadier start to the year.
Colleen Babcock (main picture, inset), property expert at Rightmove, said: “It’s an encouraging start to the year to see sellers confident enough to list their homes at higher prices after several months of muted price growth last year, coinciding with more potential buyers returning to market.
“First-time buyers, won’t want to see prices rising too quickly.”
“Some buyers, particularly first-time buyers, won’t want to see prices rising too quickly. However, asking prices are only back to where they were in the summer of 2025 before the Budget rumours began surfacing, which unsettled the market and dented confidence.
“This new year seller confidence is a good sign, but sellers would do well to listen to the guidance of their agent when setting their asking price and avoid being over-optimistic.
“Sellers need to be realistic and balance the price they want to achieve with the likelihood of being able to find a buyer in their local market at that price.”
BETTER MORTGAGES
Mortgage affordability has also improved. Rightmove’s mortgage tracker shows the average two-year fixed rate has fallen to 4.29%, down from 5.03% a year ago and its lowest level since before the September 2022 mini-Budget.
The cheapest available 2-year fixed rate for borrowers with larger deposits now stands at 3.47%.
For a buyer purchasing at the national average asking price with a 20% deposit, this reduction equates to a saving of more than £100 a month compared with last year.
AFFORDABILITY GAP
Babcock added: “It’s early days but there are encouraging signs that more home-movers are now planning a 2026 move as we head towards the important Spring buying and selling season.
“Many buyers have seen their affordability improve with average wage rises outstripping average property prices.
“Mortgage rate cuts at the end of 2025 and beginning of 2026 will also support those who are looking to move and come as some very good news at the start of the year, with a typical home-mover seeing their affordability improved by around £100 a month.”
RATE EXPECTATIONS
Matt Smith, Rightmove’s mortgage expert, said lenders have continued to trim rates to capture early-year demand but warned that further falls may be limited.
“The financial markets are currently expecting no more rate cuts until the second quarter of the year, with the Bank of England Base Rate likely to be held during the next rate decision in February.
“Mortgage rates are therefore likely to be steady for the next few months, with only minor changes up or down.
“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.”
SIGHT OF RELIEF
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Buyers and sellers breathed a collective sigh of relief when tax changes in the Budget turned out to be not as punitive as many expected.
“Although the Rightmove survey looks at asking, rather than selling, prices of newly-listed homes, activity is definitely ‘on the up’ buoyed by falling mortgage rates and inflation.
“However, sellers should be careful not to get too carried away. The amount of new and existing stock – especially flats – as well as underlying worries about employment prospects, are keeping a lid on what buyers are prepared to pay.”
BOUYANT MOOD
Tomer Aboody, director of specialist lender MT Finance, says: “Whether we are seeing a new year bounce or whether the reduction in base rate at the end of last year is behind it, there is a buoyant mood in the housing market with good activity from buyers and sellers alike.
“However, with more stock soon to come to the market, this will surely keep prices in check.
“With the prospect of further rate reductions, we are hoping to see increased activity in the form of more transactions as the year pans out. Lower mortgage rates may not be enough though – encouragement from the government in the form of another stamp duty concession or reform may be required to boost activity in a meaningful way.”
