January 20226 UK Premium Property Market Update

In my 2025 review, I noted that the premium property market had a lot to contend with last year, with nearly a third of it overshadowed by speculation about tax reforms ahead of the Autumn Budget, particularly the talk around potential stamp duty reform and a mansion tax.

There hasn't been any similar noise surrounding the upcoming Spring Budget on 3rd March, but that doesn't mean we've been without headlines capable of rattling consumer confidence.

2026 began against a backdrop of significant global uncertainty. Donald Trump's return to the White House has reignited geopolitical tensions, with aggressive rhetoric around Greenland's sovereignty and Iran's nuclear programme creating unease in international markets. Meanwhile, Venezuela's disputed election results have added to broader concerns about global stability. For the UK property market, this kind of uncertainty typically translates into caution.

Closer to home, political uncertainty has also unsettled markets. When Manchester Mayor Andy Burnham announced he would stand in January's Gorton and Denton by-election, a move that could have challenged Prime Minister Keir Starmer's leadership, bond markets reacted nervously, despite him ultimately being blocked from standing. The market's response to mere speculation demonstrated that investors remain deeply concerned about the government's tight financial headroom and fiscal credibility.

As one analyst noted, "although things have calmed down, fundamentally the market is still very concerned about the backdrop and sentiment remains very fragile."

With a Prime Minister on borrowed time, the UK housing market is once again operating in an uncertain political landscape.

Of course, the market has experienced similar moments in recent years, with the resignations of Boris Johnson, Theresa May and Liz Truss, and even Rishi Sunak's departure after the general election in July 2024, which was a virtual certainty long before it happened.

The short answer: not particularly well. Resignations have tended to cause mortgage approvals and new buyer registrations to temporarily dip, as the chart below from Knight Frank illustrates.

However, and this is the crucial point, these dips have consistently proven to be just that, temporary. Each time, the market has absorbed the shock, found its footing, and moved forward.

The supply side of the market is in robust shape. Stock levels are up 6% year-on-year and sit 7.5% above the January average for the 2021–2026 period, while new listings have surged 8% year-on-year and a significant 27% above the five-year January average. Sellers, it seems, are not being deterred by the headlines.

The demand picture is a little more nuanced. Sales agreed are down 6% year-on-year, which on the surface might raise an eyebrow, but it's worth remembering that January 2025 was particularly busy across the whole market, with buyers racing to complete ahead of the stamp duty deadline at the end of March. When set against the longer-term trend, sales agreed remain 5.5% above the January average, suggesting that while activity has softened from last year's inflated levels, it hasn't fallen off a cliff.

There are, however, some signs of friction. Price reductions are down 2% year-on-year, but sit a notable 42% above the January average, indicating that a significant portion of the market is still adjusting to where buyers are willing to transact.

This is worth pausing on, because the ripple effects of overpricing extend well beyond the initial reduction itself. According to the latest data from Rightmove, properties that have undergone a price reduction are 20% less likely to sell, and if they do, they take two and a half times longer to reach completion and are twice as likely to fall through. They are also three times more likely to require a change of estate agent and 29% of properties are now selling with their second agent. In other words, overpricing doesn't just lead to reductions, it creates a chain reaction that feeds directly into higher withdrawal rates and more fall-throughs. These aren't separate problems; they're symptoms of the same underlying issue.

That connection is visible in the January data. Withdrawals are up 7.75% year-on-year and 42% above the January average and when properties take longer to sell and are less likely to complete, it's no surprise that more sellers are choosing to pull out rather than endure a drawn-out process. The elevated price reduction levels we're seeing are, in many cases, the starting point for these withdrawals.

On a more encouraging note, fall-throughs are down 17% year-on-year and only marginally above the January average at 3.5%, suggesting that where deals are being agreed at realistic prices, they are sticking, a sign of more committed buyers and sensible pricing at the point of sale. The message for the market is clear: get the price right from the outset, and the chances of a smooth, successful transaction increase dramatically.

The premium market has started 2026 in a far healthier position than the headlines might suggest. Supply is strong, sellers are confident enough to come to market, and demand, while softer than the stamp duty-fuelled rush of early 2025, remains comfortably above the longer-term average.

But the data also carries a clear warning. The gap between where sellers want to be and where buyers are willing to transact remains the single biggest source of friction in this market. When pricing is right, properties are selling, FACT! When it isn't, the consequences are significant, longer timescales, higher fall-through risk, agent switches, and ultimately, withdrawals. The Rightmove data leaves little room for debate on that front.

For agents operating in the premium space, the opportunity in 2026 is real, but it belongs to those who are having honest, evidence-based pricing conversations from the very first instruction. Telling a homeowner what they want to hear might win the instruction, but telling them what they need to hear is what gets them moved. That's not being blunt, it's being kind.

The market is rewarding realism and punishing optimism, and in a landscape shaped by political uncertainty and cautious buyers, the agents who thrive will be the ones who have the courage to guide their clients to the right price from the outset, rather than letting the market do it for them the hard way.

The total value of the UK's housing stock has reached £9.18 trillion, according to the latest data from Savills, and is now worth 3.8 times the market capitalisation of the FTSE 100 at the end of 2025.

The research found that overall housing value increased by £136 billion during 2025, although this marks a notable slowdown from the £268 billion added the previous year. Capital appreciation of £336 billion since the end of 2022 is the lowest Savills has observed over a three-year period since 2013.

Further analysis reveals that 673,000 properties across Great Britain are currently valued at £1 million or more, which works out to 1 in every 45 British homeowners now sitting in a million-pound property. That number has fallen 9% since the 2022 peak, when the ratio stood at 1 in 40, a decline of more than 63,500 homes, including 29,400 in the past year alone.

However, context matters here. Million-pound properties are still far more common than they were before Covid, with 29% more than in 2019, when just 1 in every 55 properties crossed the threshold. There was a 31% surge in numbers between 2019 and 2022, driven by the pandemic-era mini housing boom, but 30% of those who achieved million-pound status during that period no longer hold it.

It's far from all doom and gloom for the premium market, though. Savills are forecasting a 1.5% increase in prime property values during 2026 and expect a 17.6% rise by the end of 2030, so the pool of property millionaires is likely to grow again before the decade is out.

And while the number of properties valued above £1 million+ may have dipped in the short term, the first part of the Voice of the Agent 2026 report highlights a theme that should give anyone operating in the premium space real confidence: the size of the opportunity remains substantial.

The average fee above £1 million rises from an overall market average of 1.2% to 1.4%, climbing to 1.8% above £3 million. What this means is that whilst the million-pound-plus market represents just 6% of instructions, it commands a significant 28% share of total fees across the entire market.

The premium market may have contracted slightly in the short term, but the opportunity it presents is anything but small and all the forecasts suggest that isn't changing anytime soon.

Thank you for reading the latest edition of my premium property market update. If you haven't already, be sure to subscribe so you don't miss the next edition landing in your inbox in March, where I'll be reviewing how the premium market fared in February.

P.S. I recently made a guest appearance on a live webinar with Perry Power attended by over 100 agents talking all things direct mail and you can CLICK HERE to watch it back.

P.P.S. I also jumped on The Complete Agent podcast as a guest and it’s worth a listen if you’re operating in the higher end and wanting to increase your fees.