On a quarterly basis prices were 1.9% higher in the three months to January than the previous three months (August-October) – the first increase in the quarterly rate of growth for six months.
Martin Ellis, Halifax’s housing economist, said: "This bounce-back in house price growth in January coincides with reports of the first rise in mortgage approvals for six months in December.
“These improvements may indicate that the recent declines in mortgage rates, the reform of Stamp Duty and the first increases in real earnings for several years are providing a modest boost to the market.
“It is, however, too early to draw any firm conclusions.
“The monthly figures in January can be particularly volatile due to the lower volumes of activity at this time of year and there have been unusually large rises on occasion in the past, such as in 2007 (2.3%) and 2009 (2.4%).”
Annually prices were 8.5% higher between November and January compared to the same three months a year ago, up from 7.8% in the three months to December.
In June 2014 annual house price growth peaked at 10.2%, however January’s total is the highest since October 2014 (8.8%).
Jeremy Duncombe, director of Legal & General Mortgage Club, said: “These figures show that house price growth is starting to pick up again.
“However it is important that consumers look at the long-term trends rather than focussing too heavily on short-term statistics.
“Whilst prices are increasing they are doing so at a slower rate.
He added: “We still expect gross lending to increase in 2015 to around £225bn as interest rates remain low and remortgage volumes to increase as borrowers seek to take advantage of rock bottom rates that won’t be around forever.
“The major long-term problem remains a lack of supply which urgently needs to be addressed.
“A healthy and sustainable housing market is hugely important to the overall economic health of the country and therefore that should push this issue towards the top of the political agenda as the general election approaches.”
Mortgage approvals increased by 2% between November and December to stand at 60,275 after falling for five successive months.
Ellis added: “We expect the overall downward trend in house price growth seen since last summer to continue over the coming months.
“Nationally, house prices are predicted to increase in a range of 3 to 5% in 2015 compared with 8% last year."
