UK housing market reports biggest monthly price jump in over a decade

Rightmove reported an impressive 2.8% growth in the average price of homes coming to the market in January 2026. While this is the largest ever price increase seen in the month for January, it is also the largest for any month since June 2015.

Key highlights from January 2026

• Average property prices across the UK and in London increased by 2.8%.
• The average price of a London home is 84.7% more than the national average.
• Monthly price growth in London was highest in Westminster (3.4%) and Hillingdon (2.4%).
• While buyer demand rose 57%, the number of homes listed for sale increased 81%.
• The average rent in London increased by 2.1% and is currently £2,268.

A post-Budget rebound in market sentiment

With the uncertainty around higher property taxes put to rest in the last Autumn Budget, property prices rebounded sharply in January as buyer and investor sentiment improved. The average price of a home in the UK increased by 2.8% to reach £368,031, while the monthly average for London was also up by 2.8% and reached £679,782 after dropping to £661,186 in December 2025. Compared with annual data, average property prices in the UK are up 0.5% YoY and 0.9% in the capital.

Westminster and Hillingdon are the top-performing London Boroughs

Within the UK capital, the central London Borough of Westminster recorded the best monthly growth as prices increased by 3.4%, followed by Hillingdon’s 2.4% growth. Havering and Tower Hamlets were among the Boroughs that recorded the highest annual growth in prices of 4.3% and 4.2% respectively.

Top 5 London Boroughs with the highest monthly price growth

Top 5 London Boroughs with the highest annual price growth

Disclaimer: Prices changes and updates as per Rightmove House Price Index published on January 19, 2026

Rebound in market activity as buyer demand and sale listings increase

Activity in the housing market picked up after the usual festive lull, as buyer demand rose by 57% in the two weeks after Christmas. The number of new homes listed for sale also increased by 81% during the same time.

Although Rightmove reported its busiest-ever Boxing Day visits, demand was slightly lower than at the start of 2025, when buyers were trying to beat the Stamp Duty deadline in April 2025. However, with demand picking up at the start of 2026, the market is showing positive signs as we head towards the peak Spring selling season.

New Bill draft banning leasehold and capping ground rents

The UK Government added more details to its draft Leasehold and Commonhold Reform Bill , which aims to ban the use of leasehold for new flats and replace it with a reformed commonhold model as a default tenure. In a move that will benefit millions of leaseholders, the proposed Bill also aims to cap ground rents at £250 a year, with the rate reduced to a peppercorn after 40 years.

New development launches in Hong Kong and Malaysia

Benham and Reeves Hong Kong hosted the launch of London Square’s latest property development in Battersea, Ransome’s Wharf. A riverside development by the Thames, buyers and investors can choose from a range of one to four-bedroom homes at this brand-new scheme.

Meanwhile, our Malaysia office will be showcasing a new riverfront development by Berkeley Group in Bath. One Waterside is a collection of beautiful studios, one, two and three-bedroom apartments near the River Avon.

Benham and Reeves India team in London

Homebuyers and investors from India can book an exclusive London property tour with the Benham and Reeves India team, who are currently in London. This personalised tour covers sought-after development sites across the UK capital.

Rent inflation in London slows down amid rising stock levels

The Office for National Statistics reported a 2.1% increase in average monthly London rents, which is slower compared to the 4% inflation in average rents across the UK. At £2,268, the average rent in the capital is 66% higher than the national average of £1,368.

This slowdown in rental inflation comes at a time when the availability of rental stock in London is higher than usual, as LonRes reported 36.6% more homes on the market across prime London. The property data platform also reported a 16.9% annual increase in lettings agreed and 59.1% increase in new instructions.

Improved affordability boosts landlord sentiment

According to Rightmove’s latest rental trends tracker, the average two-year buy-to-let (BTL) mortgage rate for a landlord with a 25% deposit is 4.84%, compared with 5.51% last year. This has boosted rental investment activity, as the number of new BTL mortgages increased by 13% in the year to October 2025, while remortgages increased by 23%, suggesting renewed confidence among landlords.

As your trusted property lettings and management partner in London, Benham and Reeves offers a range of services to help buyers, investors, landlords and sellers achieve successful outcomes. Our 21 London branches are supported by 13 international offices and multiple country desks.

Whether you are looking to buy, sell or let your London property, you can contact us for the right assistance.