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UK Housing Market Shows Tentative Signs of Stabilization

  //house-home.news-articles.net/content/2026/01/1 .. rket-shows-tentative-signs-of-stabilization.html
  Published in House and Home on Sunday, January 18th 2026 at 20:12 GMT
      Locale: UNITED KINGDOM

Monday, January 19th, 2026 - The UK housing market, long characterized by price declines and uncertainty, is exhibiting tentative signs of stabilization, with asking prices experiencing a slight increase for the first time in over a year. According to the latest report from Rightmove, the UK's leading property portal, average asking prices have risen by 0.3% compared to December 2025. While this modest uptick - the first monthly gain since October 2023 - isn't signaling a full-blown recovery, it does represent a shift from the prolonged downward trend seen throughout much of 2024 and 2025.

This preliminary recovery is tempered by a cautious outlook from market analysts. Rightmove's head of research, Matthew Smith, emphasized that the market's current state is one of stabilization, not resurgence. "The market is stabilising, but it's early days and the impact of higher interest rates means there's still a degree of fragility," Smith stated, highlighting the ongoing influence of economic factors on the property sector.

Demand and Regional Variations

The report points to a key driver of this stabilization: an increase in buyer demand. This demand appears to be particularly pronounced in London and the South East, traditionally high-value regions of the UK. This suggests that wealthier buyers, less sensitive to fluctuating mortgage rates, are re-entering the market, perhaps seeking opportunities amidst the previously depressed prices. However, affordability remains a significant hurdle for many first-time buyers and those on tighter budgets.

Seller Activity and Supply

Rightmove's data also reveals a surge in properties being listed for sale. This increase is partially attributed to sellers attempting to capitalize on the marginal price increase before the end of 2025, effectively trying to time the market. Despite this uptick, the total number of properties available remains below the pre-pandemic levels of 2019, a crucial indicator of ongoing supply constraints which historically have supported house prices.

The Mortgage Rate Factor

The elephant in the room, consistently impacting the housing market's trajectory, continues to be the level of mortgage interest rates. While there have been predictions of rate cuts throughout 2025 and early 2026, these have been slow to materialize, keeping borrowing costs elevated and dampening overall affordability. Prospective homebuyers are still grappling with the reality of higher monthly payments, impacting their purchasing power and slowing down transaction volumes. Economists predict that significant and sustained rate reductions are necessary to truly unlock the potential for a more robust market recovery, and any future fluctuations in the global economic landscape could easily derail these hoped-for reductions.

Looking Ahead: A Cautiously Optimistic Outlook

Despite the fragility of the market, the slight rise in asking prices is undoubtedly a positive development. It indicates a potential shift in sentiment among both buyers and sellers, suggesting a growing confidence that the worst of the price declines may be over. However, any widespread rebound remains contingent on broader economic factors, particularly the direction of interest rates and the overall health of the UK economy.

Industry experts advise potential buyers to proceed with caution, carefully assessing their financial situation and securing the best possible mortgage deal. Sellers, while encouraged by the price increase, should remain realistic about the time it may take to achieve their desired sale price, given the ongoing challenges in the market. The UK housing market's journey to recovery is likely to be gradual and uneven, characterized by periods of stability punctuated by potential volatility.