Housing - Jan 2026

Economy Headlines

The Bank of England has cut interest rates from 4% to 3.75% - the lowest level since February 2023.

Monthly GDP is estimated to have grown by 0.3% in November, following a fall of 0.1% in October 2025 (ONS).

CPI inflation rose by 3.4% in the 12 months to December 2025, up from 3.2% in November (ONS).

House prices

Average house prices across the UK were £271,188 in November, which is 2.5% higher than a year ago (ONS).

The average asking property price rose to £368,031 in January, up 2.8% from December, marking the largest January increase on record (Rightmove).

House prices are forecast to grow by 3.3% in 2026 (HM Treasury Average of Independent Forecasts).

Transactions

There were 100,350 transactions in November, up 8% year-on-year (HMRC).

In the latest RICS survey, a net balance of +34% of respondents anticipate that sales volumes will pick up over the year ahead, the strongest reading since the end of 2024.

Overall, the number of sales agreed in 2025 was 3% higher than in 2024 (Rightmove).

Demand

There were 64,530 mortgage approvals in November which is -2% lower than a year ago (Bank of England).

In the two weeks post-Christmas, buyer demand rose by 57% compared to the two weeks before Christmas (Rightmove).

A net balance of -24% was returned for the RICS new buyer demand series in December, slightly improved from November.

Investment/lettings

The average void period dropped from 24 days in November to 23 days in December (Goodlord).

Rents are forecast to increase by 3-4% over 2025 as slower growth in large cities is offset by faster growth in more affordable markets (Zoopla).

The average rent in December was £1,317, up 2.6% year on year (HomeLet).

Development

Over 208,317 new homes were built in the year to the end of Q3 2025, a fall of 5% compared to the previous 12 month period (DLUHC).

There are now over 132,295 completed Build to Rent units, an uplift of 12% nationally, year on year (BPF).

The HBF says that to meet the government's target of building 370,000 homes annually, approvals must increase by over 150%.