The number of transactions also rose by 13% in February.
Richard Sexton, director of e.surv, said part of the increase was due to the looming stamp duty holiday creating a surge in transactions however it was not the sole cause of the improvement in the housing market.
He said: “Despite the threat posed by the eurozone crisis, lenders have been showing increasing confidence, stepping up their lending to the lower end of the market.
“The annual decline in prices may have accelerated to 1.8% in February but the comparison highlights the spike in demand and prices in the prime property in the run-up to last April as buyers rushed to beat a new 5% tax band for £1m properties, rather than a worsening outlook for the current housing market.
“In fact against a wider backdrop of more positive national economic news and falling information, buyer sentiment has shown signs of picking up.”
Sexton added that the passing of the first-time buyer stamp duty tax deadline would put the recent progress to the test in the short-term.
He said that the historically affordable rates and the introduction of the NewBuy mortgage scheme should help cushion the financial blow.
“In the longer term any concerted rise in transactions will be tied to the fallout of the financial crisis abroad and subsequently banks and building societies’ abilities to support the market’s growth.”
