The monthly change from December 2011 to January 2012 was 1.1%, bringing the average house price to £161,545 in England and Wales.
The region in England and Wales which experienced the highest increase in its average property value over the past 12 months was London with a movement of 2.9%.
London also experienced the greatest monthly rise with a movement of 2.5%.
The North East experienced the greatest annual price fall with a decrease of 4.5%.
The North West saw the most significant monthly price fall with a decrease of 2.1%.
The latest figures show that during November 2011 the number of completed house sales in England and Wales increased by 3% to 57,967 compared to 56,312 in November 2010.
Tracy Kellett, managing director of BDI Home Finders, said: “The January Land Registry data is yet more proof of how house prices are continuing to defy logic.
“Long-term, house price rises like this are not sustainable. They are being propped up by an extreme lack of stock and historically low interest rates.
“The January house price rise is not good news for the market, it's quite the opposite. The higher the market rises in the current climate, the harder it will fall.”
Russell Quirk, director of Emoov, however said that January’s price rises hinted at a steady return of confidence.
He said: “For four years, most of those moving were people who had to do so. Many “discretionary” movers were put off by fears of a second property crash.
“The coiled spring of anticipation is slowly beginning to unwind as more would-be buyers see buoyancy return to the market.”
Paul Hunt, managing director of Phoebus Software, said the rising prices showed the importance of mortgage lending in supporting the property market.
He said: “As lenders have taken advantage of the low Base Rate to offer affordable finance, buyers have taken the opportunity to lock themselves into the market at favourable rates.
“This has pushed up lending volumes, which have risen in seven of the last eight months and property prices have risen accordingly.
“Of course some of the demand currently boosting the market is part of a rush to beat the Stamp Duty holiday but the improving availability and affordability of mortgage finance is the only way to sustain the housing market in the long term.”
