Having predicted a busy start to the new year in our previous blog, we are happy to see that our future-gazing has, so far at least, become welcome reality. The latest house price index from Rightmove shows the biggest jump in January prices on record. This signals a returned confidence after details of the Autumn Budget were finally revealed in November and the base rate was cut to 3. 75% in December.
It’s an impressive feat, but the caveat is that it comes on the back of weak month-on-month comparatives after house prices were impacted by the uncertainty around the budget in the final quarter of the year, particularly in London where nerves around property taxes were high.
Rightmove had reported a -1.8% month-on-month fall in prices across the UK for December and a 1.2% fall for the capital, while Nationwide reported a -0.4% month-on-month fall for December as house price growth had slowed.
However, buyers, sellers and landlords are nothing if not resilient and the budget confirmation and latest interest rate cut seem to have been the confidence boost they needed to return to the market.
Encouraging positives
January has already delivered two encouraging positives, according to Rightmove. Average prices for both the UK and London rose by 2.8% from December. This equates to an average UK price of £368,031 and a London average price of £679,782, according to Rightmove’s January house price index. The company is the first to report January pricing, so the data is a little skewed but it’s certainly encouraging.
Mortgage rates are also down with trackers showing an average two-year mortgage rate of 4.29%, the lowest rate since the mini-budget of 2022 and down from 5.03% at this time last year.
Interest ignited
These factors have helped ignite interest for the early new year. Rightmove reported its busiest ever Boxing Day for visits to its platform. Activity since has also been strong, with buyer demand rising 57% and the number of newly listed homes up 81% for the first two weeks after Christmas, compared to the two weeks before.
Encouraging news
Such a strong start marks encouraging news for those looking to buy, sell or rent in the capital. Prices are set to continue to grow this year, with predictions ranging between 2-4% for the year for the UK. London will see lower growth of around 1-2% in 2026, according to Savills and Knight Frank predictions but the market will continue to stabilise this year, especially as improving affordability and reduced borrowing costs take effect.
Competition to sell is still tough, with the number of properties available for sale at the highest for this time of year since 2014, but buyer numbers are also increasing. The development of Canada Water remains a huge draw for buyers in our local area, with the first phase completed last summer and work continuing in 2026.
For sellers, realistic pricing remains essential, since a third of properties are being cut in price to shift them. Effective staging is also vital. Such factors are particularly crucial in the London market, where the time to secure a buyer rose to 86 days in December, according to Rightmove.
The rental market should also remain resilient now that similar certainty has been delivered with the announcement of the timescales for the Renters’ Rights Act, the main components of which come into force from May 1. There has been a shakeout of landlords leaving the sector, but as well as pushing up rents for remaining landlords, that has created a healthy provision of properties for new landlords or those wanting to expand portfolios.
Whether you’re looking to buy, sell, rent or let in 2026, or simply need professional advice from a 5-star-rated, multi-award-winning agency, we’re ready to assist.
Contact us on 0207 231 0002, email us at welcome@living-london.net or get a free instant online valuation by clicking here.
020 7231 0002
welcome@living-london.net
