THE UK PROPERTY MARKET ENTERS 2026 WITH RENEWED CONFIDENCE AND STRONG MOMENTUM

Friday January 23, 2026

 

The UK housing market has opened 2026 with a decisive return of confidence, marked by rising prices, increasing buyer demand and a clear shift in sentiment following a more cautious end to 2025.

According to the latest national data, average asking prices in January rose by 2.8%, taking the UK average to approximately £368,000. This represents the largest January increase on record, and one of the strongest single-month price movements seen in over a decade. Importantly, prices now sit slightly above this time last year, confirming that the market has moved beyond the uncertainty that characterised late 2025.

This recovery has been widely echoed across the market, with major national commentators and financial analysts confirming the same pattern: sellers returning, buyers re-engaging, and transaction confidence rebuilding.

A Post-Christmas Surge in Activity

One of the most telling indicators of renewed momentum has been the sharp rise in activity following Christmas:

Buyer demand increased by more than 50% in the weeks immediately after Christmas
New listings surged by over 80% in the same period
Boxing Day saw record levels of property search activity nationally

This early-year bounce is traditionally a strong barometer for the spring market and suggests that both buyers and sellers are now positioning themselves decisively for the year ahead.

Crucially, this surge is not being driven by speculation or overheated conditions, but by genuine transactional demand from home movers, upsizers and first-time buyers returning to the market with greater confidence.

Affordability is Supporting Market Stability

Unlike previous cycles of sharp price growth, this upswing is being supported by improving affordability, rather than undermined by it.

Mortgage rates have eased significantly from their 2023-24 peaks, with typical two-year fixed rates now close to pre-mini-Budget levels. At the same time, wage growth has outpaced house price inflation over the past year, improving buyer purchasing power and restoring balance between prices and incomes.

As a result, the typical house price to earnings ratio for first-time buyers is now at its most favourable level for over a decade, helping to explain the renewed depth of demand entering the market.

Stock Levels Creating a Healthy Market Dynamic

Another positive signal is the level of available housing stock. The number of properties for sale is currently at its highest for this time of year since 2014, giving buyers greater choice and helping prevent the market from overheating.

This combination of strong demand and healthy supply is precisely what underpins a stable, sustainable market rather than a volatile one. It allows prices to rise modestly while still maintaining transaction fluidity.

For sellers, this reinforces the importance of realistic pricing and professional marketing, as competition between listings remains strong even in a rising market.

A Positive Outlook for 2026

Looking ahead, forecasters are broadly aligned in their outlook for 2026: a year of measured growth rather than dramatic spikes, with prices expected to rise steadily rather than sharply.

Most projections point towards annual growth in the region of 2-3%, with regional variations likely to see particularly strong performance across parts of the Midlands, the North of England, Scotland and Wales, where affordability remains most attractive.

London and the South East are also expected to benefit from renewed confidence and falling mortgage rates, particularly within the commuter belt and prime suburban markets.

What This Means for Buyers and Sellers

For buyers, the current environment presents a rare window where choice, affordability and stability align. With more stock available and borrowing costs improving, serious buyers are well-placed to negotiate effectively and secure long-term value.

For sellers, rising prices and increased buyer demand provide a supportive backdrop, but success will depend on accurate pricing, presentation and exposure. Over-pricing in a competitive market still carries risk, even in positive conditions.

For investors, the combination of stable prices, improving yields and easing finance costs reinforces UK residential property as a resilient long-term asset class.

Auckland Estates’ View

At Auckland Estates, we view the start of 2026 as a clear inflection point for the UK property market.

The return of confidence, supported by improving fundamentals rather than speculative behaviour, creates a constructive and sustainable platform for growth across the year ahead. For homeowners, movers, landlords and investors alike, the message is clear: the market is active, stable and once again offering genuine opportunity.

If you are considering selling, buying, investing or simply want a professional assessment of your position in the current market, our team would be pleased to advise.