January 2026 opens with a decisive market signal: Rightmove recorded its largest January asking price rise in 25 years (+2.8%), while December transaction data from Halifax (-0.6%) and Nationwide (-0.7%) confirmed 2025 closed on a subdued note. The divergence tells a clear story—sellers are pricing for recovery, but buyers remain in control with stock at an 11-year high for this time of year.
Full-year 2025 delivered just 0.6% growth according to Nationwide—below forecasts and barely keeping pace with inflation. Yet mortgage approvals remain robust, the base rate has fallen to 3.75%, and regional outperformance in affordable northern markets continues unabated. The stage is set for a more active 2026, provided sellers resist the temptation to overprice into nascent demand.
1) Rightmove: Record January bounce signals renewed confidence
Rightmove's methodology: Tracks asking prices from new listings, providing the earliest indicator of seller pricing behaviour and market sentiment shifts.
January 2026 key points:
- Average asking price: £368,031 (up 2.8% month-on-month)
- Record January rise: Largest in Rightmove's 25 years of reporting
- Biggest monthly jump since June 2015
- Annual growth: +0.5% versus January 2025
- Buyer choice: Highest for this time of year since 2014
What this index tells us about the UK housing market:
Post-Budget confidence materialising: The £9,893 monthly asking price increase represents a dramatic reversal from December's -1.8% decline. Rightmove attributes this to "market sentiment rebounding from the rumours and uncertainty around the November Budget"—the clarity sellers waited for has arrived, and they're pricing accordingly.
Sellers returning in force: Rightmove recorded its busiest ever Boxing Day for platform visits, with buyer demand over 20% ahead of 2023 and pre-pandemic years. However, demand is tracking 10% behind the exceptionally strong start to 2025, when stamp duty deadline pressures drove activity.
Supply remains a buyer's advantage: Despite the asking price surge, around a third of existing homes listed for sale have already reduced their asking price. This creates a two-tier market: fresh listings at optimistic prices competing against discounted stock from sellers who've accepted reality. For buyers with patience, the inventory advantage persists.
Caution warranted on overpricing: Rightmove warns sellers not to "get carried away"—the record January rise reflects seasonal patterns and post-Budget relief rather than fundamental demand shifts. With buyer choice at decade-high levels, properties priced above market will face extended marketing periods regardless of headline sentiment improvements.
2) Halifax: December weakness closes out subdued 2025
Halifax methodology: Based on mortgage approval data from major lender transactions, reflecting actual agreed prices rather than initial seller aspirations.
December 2025 key points:
- Average property price: £297,755 (down 0.6% month-on-month)
- Lowest level since June 2025
- Annual growth: +0.3% (down from +0.6% in November)
- Regional leadership: Northern Ireland at +7.5% annually
- Scotland: +3.9%, North East: +3.5%, Wales: +1.6%
What this index tells us about the UK housing market:
Budget uncertainty took its toll: December's -0.6% monthly decline—down £1,789 from November—confirms the pre-Budget hesitancy fed through to completed transactions. Halifax Head of Mortgages Amanda Bryden characterises this as "a subdued close to the housing market in 2025" while noting "overall activity levels were resilient over the last year and broadly in line with the pre-pandemic average."
Affordability at decade-best: Halifax highlights that "the house price to income ratio was at its lowest in over a decade in December"—a positive signal for first-time buyers despite headline price weakness. This structural improvement in affordability, combined with mortgage rates "already reducing following the latest Base Rate cut," creates foundations for 2026 recovery.
Regional hierarchy entrenched: Northern Ireland's +7.5% annual growth continues its consistent outperformance throughout 2025. The North East (+3.5%) and Scotland (+3.9%) demonstrate affordable markets sustaining momentum while expensive southern regions lag. This pattern has persisted for 18+ months with no sign of reversal.
3) Nationwide: 2025 delivers below expectations
Nationwide methodology: Uses building society's mortgage approval data to track transaction prices, with additional focus on affordability metrics and economic context.
December 2025 key points:
- Average property price: £271,068 (down 0.7% month-on-month)
- Full-year 2025 growth: +0.6% (below Savills' 1.0% forecast)
- Top performer: North West at +3.5% annual growth
- Weakest region: East Anglia at -0.8% (only region in decline)
- London: +0.7% annually, underperforming South East (+0.1%) and South West (+0.5%)
What this index tells us about the UK housing market:
Consensus forecasts proved optimistic: The 0.6% full-year growth fell short of industry expectations, with Savills noting it was "slightly lower than our forecast of 1.0%." This underperformance reflects the compounding impact of Budget uncertainty in H2 2025 and persistent affordability constraints in expensive southern markets.
North-South divide crystallises: The 4.3 percentage point gap between North West (+3.5%) and East Anglia (-0.8%) demonstrates regional divergence based purely on affordability. Markets where average prices remain accessible to local earnings continue growing; those stretched beyond affordability limits are correcting. Nationwide expects "a similar regional trend to continue through 2026, with more price growth in more affordable markets."
First-time buyer activity at post-GFC highs: Nationwide reports 384,000 first-time buyer mortgage completions in the 12 months to September 2025—the highest level since the Global Financial Crisis, excluding the brief post-Covid spike. This demonstrates underlying demand strength at entry-level price points despite muted overall price growth.
4) ONS: October data confirms regional divergence
ONS methodology: Uses data from HM Land Registry, Registers of Scotland, and Land & Property Services Northern Ireland to track final transaction prices across all residential property sales, including cash purchases.
October 2025 (most recent data) key points:
- Average property price: £269,862
- Most comprehensive coverage: Includes all cash and mortgage transactions
- Two-month lag: November and December ONS data unavailable until future releases
- Annual growth: +1.7% (October 2024 to October 2025)
What this index tells us about the UK housing market:
Comprehensive view confirms modest growth: ONS data, while lagging by approximately two months, provides the most complete picture of actual transaction prices by including cash purchases alongside mortgaged transactions. The +1.7% annual growth rate sits above Halifax (+0.3%) and Nationwide (+0.6%) December readings, reflecting ONS's broader coverage and earlier reference period.
Regional patterns align with lender indices: ONS regional breakdowns corroborate the north-south divergence seen in Halifax and Nationwide data. Northern Ireland, Scotland, and northern English regions consistently outperform London and the South East across all four indices, reinforcing that affordability fundamentals—not temporary factors—drive regional performance.
Watch for January release: When the ONS publishes November and December data in coming weeks, it will provide the authoritative view of how Budget uncertainty affected completed transactions across different price points and buyer types, including the cash purchase segment not captured by lender indices.
2026 outlook: Modest growth, regional variation, improving rates
Industry forecasts cluster around 2-3% national price growth for 2026, supported by an improving rate environment but constrained by elevated stock levels and stretched affordability in southern markets.
Price forecasts:
| Source | 2026 Price Forecast |
|---|---|
| Halifax | +1% to +3% |
| Nationwide | +2% to +4% |
| Rightmove | +2% |
| Capital Economics | +3.5% |
| Savills | +4% |
Interest rate environment:
Base rate at 3.75%: The Bank of England's December cut brought rates to their lowest level in nearly three years. Markets expect one to two further quarter-point cuts in 2026, with the base rate likely bottoming out between 3% and 3.25%.
Mortgage rates already reflecting cuts: Current best buys sit below the base rate—5-year fixes from 3.76%, 2-year fixes from 4.2%—as lenders price in anticipated easing. This means further base rate cuts may not translate to equivalent mortgage rate reductions; much of the improvement is already baked in.
Refinancing wave incoming: Around 1.8 million borrowers will refinance in 2026. Those rolling off 2024 two-year fixes should see improvements, while those exiting five-year deals from the ultra-low rate era will still face payment increases despite recent cuts.
Activity indicators:
Stock levels elevated: The average estate agent started January with 32 homes for sale—the highest for this time of year since 2018. Around a third of these properties were previously listed in 2025 and relisted after Q4 activity slowed. This supply overhang will limit price growth even as demand recovers.
Demand rebounding but not surging: Buyer demand at the start of 2026 is over 20% ahead of 2023 and pre-pandemic years, but 10% behind the exceptionally strong January 2025 when stamp duty deadlines drove urgency. Expect a normalised market rather than a boom.
Investment implications for development finance
January 2026 data confirms 2025's pattern: transaction prices stable with minimal growth, asking prices volatile around sentiment shifts, and regional divergence accelerating based on affordability fundamentals. For development finance, this environment rewards disciplined project selection over market timing.
Don't mistake asking price rebounds for transaction price strength: Rightmove's 2.8% January jump reflects seller confidence, not buyer willingness to pay. Halifax's -0.6% December decline and Nationwide's 0.6% full-year growth represent actual transaction reality. Development exit assumptions should anchor to transaction indices, not asking prices.
Regional strategy remains paramount: Northern Ireland (+7.5%), North East (+3.5%), and North West (+3.5%) delivered 2025 growth rates 3-7x the national average. These markets combine affordability, transaction velocity, and genuine price momentum. Southern exposure requires conservative GDV assumptions and extended marketing period provisions.
Rate environment supports activity, not appreciation: The 3.75% base rate and sub-4% five-year fixes improve transaction velocity by bringing more buyers into qualifying criteria. However, this supports volume recovery rather than price growth—the fundamental supply-demand balance in most markets remains buyer-favourable.
2026 consensus suggests modest tailwind: The 2-4% forecast range from major institutions provides a reasonable planning assumption for GDV growth over 12-18 month project timelines. However, regional variation will likely exceed the headline—northern markets delivering 4-6% while southern markets achieve 0-2% would produce the consensus average while creating dramatically different project outcomes.
FAQs
Based on our analysis of December 2025 and January 2026 market data, here are the key questions property investors and developers are asking about current conditions.
Should I be concerned that Rightmove shows record growth while Halifax and Nationwide show declines?
No—this divergence is informative, not contradictory. Rightmove tracks asking prices (what sellers want), while Halifax and Nationwide track transaction prices (what buyers actually pay). January's 2.8% asking price surge reflects post-Budget seller confidence and seasonal patterns, not a fundamental demand shift.
The December transaction declines (-0.6% Halifax, -0.7% Nationwide) represent what actually happened in completed sales. For development finance exit assumptions, always use transaction indices—asking prices overstate market strength, particularly at turning points.
Is the North-South divide likely to continue widening in 2026?
All evidence suggests yes. The 8+ percentage point gap between Northern Ireland (+7.5%) and East Anglia (-0.8%) reflects fundamental affordability dynamics rather than temporary factors. Nationwide explicitly expects "a similar regional trend to continue through 2026, with more price growth in more affordable markets." Until southern prices correct to affordability equilibrium or wages materially outpace northern earnings, affordable markets will continue outperforming. Development strategies should overweight regions delivering 3%+ growth with proven transaction velocity.
How should I interpret the 384,000 first-time buyer figure?
This is genuinely significant—the highest first-time buyer mortgage completions since the Global Financial Crisis (excluding the post-Covid spike). It demonstrates underlying demand at entry-level price points remains robust despite muted overall market conditions. For development finance, this supports projects targeting first-time buyer demographics in the £200k-£350k range, particularly in regions with strong affordability fundamentals.
The combination of decade-best affordability ratios and improved mortgage availability at higher LTVs creates a supportive environment for this buyer segment.
With stock at an 11-year high, is now a good time for land acquisition?
Potentially, with caveats. Elevated stock creates negotiating leverage for land buyers—vendors facing extended marketing periods may accept realistic offers. However, "buyer's market" conditions in the resale market don't automatically translate to development land discounts. Focus on sites where vendors have holding cost pressure or planning uncertainty, and ensure acquisition pricing reflects conservative GDV assumptions based on December transaction data rather than January asking prices. The opportunity exists, but only for disciplined buyers willing to walk away from unrealistic vendor expectations.
What should I watch in February and March data to validate market direction?
Three indicators matter most. First, January mortgage approval figures (released late February)—if approvals remain around 65,000, the market's underlying demand is intact regardless of price volatility. Second, whether February transaction prices (Halifax/Nationwide) show recovery from December weakness or continued softness—this separates temporary Budget hesitancy from structural demand issues. Third, regional divergence trajectory—if Northern Ireland accelerates toward 8-9% while London/South East remain flat or negative, it confirms affordability is the dominant market force and should inform all strategic decisions.
Analysis compiled January 2026 using official housing market data from Rightmove, Halifax, Nationwide, ONS, and Bank of England mortgage statistics.
