UK House Prices Kick Off 2026 With Biggest January Jump on Record

The property market in the UK has shown a strong start to 2026, with Rightmove reporting the biggest January rise in asking prices since records began. The average price of homes listed for sale jumped to £368,031 in January 2026, up 2.8% (£9,893) compared with December.

While January does often see an uplift in activity after the festive lull, this year’s increase also reflects improving buyer confidence following a quieter end to 2025, due to uncertainty around the autumn Budget.

What’s Driving the Early-Year Bounce?

Several trends are shaping this early-year move in prices:

• Seasonal activity returning after Christmas: Rightmove data showed a significant surge in searches and enquiries in the two weeks after Boxing Day – a 57% increase in buyer demand compared to the two weeks prior. 
• Improved clarity on fiscal policy and the broader economic outlook compared with late 2025. 
• Affordability improvements for some buyers, as average mortgage rates have eased from levels seen in 2024 and early 2025. 

Rightmove’s figures also show that, on a year-on-year basis, asking prices are modestly higher, at around 0.5% above January 2025 levels – a sign of stabilisation rather than dramatic growth.

Supply and Buyer Choice Remain Key

One of the most interesting features of the current market is the volume of homes coming to market. The number of available properties is at its highest seasonal level since 2014, meaning buyers have plenty of choice.

Even though prices are rising overall, the sales market remains choice-rich and price-sensitive, especially outside of the busiest central urban locations.

However, in the rental market, available properties have dropped by a third (-33%) since ten years ago. In recent buy-to-let lending data, rental investment activity shows as the most positive it’s been since 2022. 

Interest Rates Lowering  

Interest rates also saw significant changes through the year, as inflation pressure eased and the Bank of England looked to support the wider economy. Early in the year, policymakers cut the base rate from 4.75% to 4.5% in February and then to 4.25% by May, reflecting progress on disinflation and slowing growth.

In August, the Bank dropped rates to 4%, and then even further to 3.75% in December 2025, which marked the lowest level in nearly three years. 

This downward shift helped ease some of the mortgage cost pressures that constrained buyers through much of 2024 and early 2025, supporting affordability and lending activity heading into 2026.

It’s widely expected for rates to be cut a further two times throughout 2026, which would put it at 3.25% – the next decision is to be made on 5th February. 

The average buy-to-let mortgage rate has dropped every month since February 2025, with the average fixed-term rate now at 4.92%.

What This Means for Investors

From an investment perspective, these early 2026 trends are worth paying attention to:

• Renewed buyer engagement suggests the market is moving beyond the uncertainty that slowed activity in late 2025. This is positive for both resale and new-build stock. 
• Supply levels are supportive, high sales stock gives buyers options, low rental availability and increasing investor confidence proves a strong buy-to-let market.
• Pricing discipline is crucial, with reductions still common where expectations were too high. 

For investors focused on longer-term strategies, particularly in regions where affordability and rental demand are strong, this stabilising market supports continued interest in well-located stock.

Final Thoughts

Rightmove’s January figures show a strong start to the year, with prices and demand up considerably from before Christmas. It’s also another sign of consistent growth for the market, with new data breaking records again and again.

Rental prices also rose throughout 2025 – an average of 2.2% for regions outside of Greater London, with the North-West leading at a 3.6% increase. 

For buyers and investors, this kind of early-year momentum is a solid platform to plan activity through 2026.