The Rightmove house price index showed this was also the largest ever price increase for the month of January.
Asking prices are now 0.5% higher than the same period last year, coinciding with the typical two-year fixed mortgage rate falling to 4.29% – the lowest since the 2022 mini Budget.
The number of homes up for sale is also at its highest for the start of the year since 2014. However, Rightmove noted that a third of homes already on the market were seeing a price reduction, so new sellers needed to be careful with pricing.
Rightmove said the housing market was set to recover after the quieter Christmas period. The firm saw its busiest Boxing Day ever for visits to the website, and in the two weeks after Christmas Day, buyer demand rose 57%, while the number of new homes listed for sale was up 87%.
Although buyer demand was lower than at the start of last year, just before the stamp duty change, it was in line with 2024’s market.
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An encouraging start to the year
Colleen Babcock, 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.”
She said some buyers, particularly first-time buyers, would not want to see prices rising too quickly, but added: “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.”
Babcock said: “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. There’s a 12-year high number of homes for sale for this time of year, so buyers have lots of choice, and a third of properties that were already on the market for sale have had a price reduction.
“This means that 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.”
