January Market Update

We hit the ground running in January, with a deluge of property news. From asking prices and value predictions to Government reforms and rental updates, there was a lot to digest. Here are the headlines and highlights.

1) January powered by the Boxing Day bounce: Rightmove announced Boxing Day 2025 was its busiest ever. Purchaser enquiries increased 67% in the five days following Christmas, compared to the five days before. New property listings increased by 143% in the same period.

Mortgage rates dropped

2) Better affordability: the start of 2026 saw lenders cut mortgage rates. Rightmove said the average two-year fixed mortgage rate is now at its lowest since 2022, pre-mini Budget. Data supplied by Podium found the cheapest two-year mortgage rate for those with a larger deposit was 3.47% in January.

Increased choice

3) Starter homes flooded the market: the number of homes for sale in January was the highest at this time of year since 2014. First-timers stand to benefit, with the most commonly listed homes smaller 0-2 bedroom properties. There are bargains too, with a third of properties having been subject to a price reduction.

4) Sellers aimed higher: Rightmove also revealed how much sellers were expecting. The average asking price for a new instruction on the portal increased 2.8% between December 2025 and January 2026. The average asking price is now £368,031.

5) Mortgage rates reduced: mortgage rates continued to decrease in January. HSBC was the first major lender to make residential and buy-to-let borrowing cheaper. The Guardian reported that sub-3.5% deals may be possible before the spring.

6) Northern prospects brightest: Zoopla published a predictions report in January, ranking the UK’s top postcodes based on price growth, days to sell and incidences of aggressive asking price cuts. Nine of the top ten postcodes were in Scotland (Motherwell, Glasgow, Paisley, Falkirk, Kirkcaldy, Edinburgh, Kilmarnock, Perth and Inverness). The 10th spot was taken by Wigan (WN) in the North West.

7)  Landlord yields increased: the latest Rental Barometer report from Fleet Mortgages revealed the average rental yield across England and Wales is 7.7%. Yields above 8% were most common in the North East, the North West, Yorkshire & Humberside, the West Midlands and the East Midlands. There were also yield increases across all monitored regions in the south.

Two U-turns announced

8 ) 2-year delay to new EPC requirements: the Government had wanted a mandatory EPC rating of at least a C for newly agreed private tenancies from 2028 – up from the current E – but this was abandoned in January. Instead, all landlords will be working to one 2030 deadline, when all private rentals must have a minimum EPC rating of C. The Government also reduced the maximum landlord investment spending cap from £15,000 to £10,000.

9) Gas boilers to stay: January also saw the Government push back on its planned ban of gas boilers (they were due to be phased out by 2035). Instead, some homeowners will be able to access a £15 billion pot to fund clean energy improvements, such as heat pumps and solar panels. 

Tenancies became cheaper

10) December rents dip: 2026 started with new tenants paying less to rent. HomeLet’s latest index showed the UK’s average monthly rent for newly signed contracts was £1,317 in December 2025. This was 1.5% lower than November’s figure.

11) Leasehold reforms revealed: the Government also published The Commonhold and Leasehold Reform Bill for England and Wales in January. If passed, existing ground rents will be capped at £250, reducing to a peppercorn rent over 40 years. It will also become simpler for leaseholders to swap to a commonhold tenure.

If you would like to know more about your local property market, please get in touch.