Hertfordshire housing market update - Early signs for 2026

According to Rightmove, average new seller asking prices increased by 2.8% (£9,893) in January to £368,031, representing the largest price rise for the month since the index began 25 years ago. This rebound follows a relatively subdued end to 2025, when many buyers and sellers adopted a more cautious approach.

However, supply remains elevated. The number of homes currently on the market is at its highest January level since 2014, and around one third of properties are already experiencing price reductions, highlighting the importance of accurate pricing when launching to market.

Encouragingly, buyer activity has strengthened. Demand in the two weeks following Christmas rose 57% compared with the fortnight before, while new listings increased by 81%. Rightmove also reported its busiest ever Boxing Day for website visits, indicating strong underlying interest from buyers heading into the new year.

Mortgage affordability is also improving. The average two-year fixed mortgage rate has fallen to 4.29%, its lowest level since before the 2022 mini-Budget. This easing in borrowing costs is helping support the early momentum we are seeing in the market.

Scott Rose, property expert at Rolstons, commented:

“It’s an encouraging start to the year to see sellers confident enough to list their homes at higher prices after several months of muted price growth last year, coinciding with more potential buyers returning to the market.”

Other major house price indices are reporting similar trends, albeit with more modest growth. Nationwide recorded a 0.3% monthly increase in January and annual growth of 1.0%, while Halifax reported a 0.7% monthly rise with annual growth also at 1.0%.

Phillip Murray, Associate Director at Rolstons, noted:

“Wage growth has been outpacing property price inflation since late 2022, steadily improving underlying affordability. That’s a positive trend for buyers, and the long-term health of the market.”

Zoopla’s index highlights the moderating influence of increased housing supply, with the number of homes for sale now 6% higher than a year ago. This greater choice is giving buyers more negotiating power and encouraging sellers — particularly in southern England — to price more realistically.
Regional differences remain pronounced. Northern cities continue to outperform thanks to stronger affordability, while Hertfordshire and London remain slightly negative on an annual basis.

Rental & Buy-to-Let Market

The rental market has also softened slightly at the start of the year.
According to HomeLet, average UK rents fell by 1.1% in January to £1,302, marking the third consecutive monthly decline, although rents remain 2.4% higher than a year ago.
Outside London, rents slipped 0.5% to £1,118, continuing a gradual easing following the sharp rental inflation seen during 2022–2023.

Two factors are influencing this shift. Firstly, falling net migration is reducing rental demand, and secondly, improving mortgage affordability is enabling more first-time buyers to move from renting into home ownership.

As a result, rental properties are now taking longer to let. The average time to secure a tenant has increased to 17 days, the slowest pace since 2019, limiting landlords’ ability to implement significant rent increases.

Regional variations remain significant. Rents are rising fastest in more affordable northern regions (3.2%–4.5%) and the Midlands (2.5%–3.3%), where there is still scope for growth. In contrast, higher-cost southern markets are seeing much flatter rental performance.

Analysts expect rental growth to settle at around 2.5% nationally in 2026, suggesting a gradual return to more typical market conditions.

Hertfordshire & London Rental Market

In Hertfordshire and London, rental growth is cooling more noticeably.

Average rents in the capital fell by 2.4% in January and are now 6.3% below their October peak, although they remain 2.6% higher year-on-year at £2,078 per month.

Only a small number of boroughs recorded monthly increases, with outer London areas such as Ealing (+9.9%) leading growth.

Rental properties in Hertfordshire and London are also taking longer to secure tenants, with the average letting time now 19 days.

If you’re considering buying, selling, or letting a property in or around Watford, we’d be delighted to help — and to show you why Rolstons continues to be recognised as one of the area’s leading estate agents.