- Average asking prices jumped 2.8 per cent in January, the sharpest rise in a decade.
- London saw a similar increase, even as the number of homes for sale surged.
- Rents fell over 2025, the first annual decline since records began.
The average price tag on a home in Britain rose by 2.8 per cent in January, adding nearly £10,000 in a single month and marking the biggest increase since June 2015, according to property website Rightmove.
The rise, equivalent to £9,893, took the average asking price across Britain to £368,031. Rightmove said this was the largest January increase recorded in its 25 years of tracking house prices.
London followed the same pattern, with asking prices in the capital rising 2.8 per cent over the month to £679,782, an increase of £18,596 compared to December.
Rightmove said January’s rebound has pushed prices close to levels last seen in August 2025, as market sentiment improves after months of uncertainty linked to expectations around the autumn budget.
Confidence returns, but competition grows
Despite the sharp rise, Rightmove cautioned that sellers may be entering a far more crowded market. The number of homes available for sale is at its highest level for this time of year since 2014, increasing competition and giving buyers more choice.
Colleen Babcock, a property expert at Rightmove, was quoted in a news report saying it was an encouraging start to the year to see sellers confident enough to list their homes at higher prices after several months of muted growth. She added that some buyers, particularly first-time buyers, may be uncomfortable with prices rising too quickly.
She was also quoted saying that asking prices are only back to where they were in summer 2025, before budget-related speculation unsettled the market. With a 12-year high number of homes for sale at this point in the year, and around a third of listings already seeing price reductions, sellers may need to be realistic when setting expectations.
Rightmove said a surge in visits to its platform on Boxing Day and a bounce in activity after the festive period helped set a positive tone for January. Improving affordability has also supported demand, with average wage growth continuing to outpace house price increases for many buyers.
Mortgage conditions have added to the picture. Several lenders have cut rates in recent weeks. Matt Smith, a mortgage expert at Rightmove, was quoted in a news report saying mortgage rates are likely to remain broadly steady over the next few months, with only minor movements up or down. He added that buyers waiting for cheaper deals may now be seeing some of the best rates available for a while.
Myles Moloney, director at Chase Buchanan Estate Agents in London, was quoted in a news report saying homes that are well presented, sensibly priced and suited to modern family living are attracting the highest levels of interest.
Rents dip as tenant demand shifts
While house prices moved higher, a separate report from property firm Hamptons showed that newly agreed rents fell by 0.7 per cent on average across Britain in 2025, marking the first full-year decline since records began in 2011.
Hamptons said the average tenant moving into a new property paid £1,371 per month, £10 less than the previous year. London recorded the steepest fall, with average new rents down 2.7 per cent to £2,294 a month.
Other regions showed a mixed picture. Rents rose in the West Midlands, North West and North East, while annual falls were recorded across the South East, Yorkshire and the Humber, Wales and Scotland. Hamptons said its lettings index is based on achieved rents using data from the Connells Group.
Aneisha Beveridge, head of research at Hamptons, was quoted in a news report saying that while 2025 appeared on paper to be a good year for tenants, falling rents were driven more by strong first-time buyer numbers and wider economic weakness than by improved affordability. She added that fewer tenants are entering the rental market for the first time, with many staying at home longer rather than committing to the cost of renting independently.
