ONS: House prices on the rise again

The increase also represents a 5.5% monthly increase from December.

On a regional basis house prices grew by 7.1% in England, 6.9% in Wales, 1.4% in Scotland and 2.7% in Northern Ireland.

In January prices paid by first-time buyers were 7.6% higher on average than in January 2013. For owner-occupiers (existing owners), prices increased by 6.5% for the same period.

Alan Cleary, managing director of Precise Mortgages said: “We’ve seen further confirmation today that the economy is firmly back on the road to recovery with house prices rising once again in January.

“Clearly it is welcome news for the buoyed mortgage market but it does also pose questions around consumer affordability.

“The impact of January price rises will be felt most acutely by first-time buyers so it begs the question, what more we can do as an industry to help those looking to make their first step on the property ladder?”

“We know that first-buyers in the UK are often hit twice: they are facing the highest price increases and, for some, they also face challenges to satisfy the criteria of main stream lenders.

“As well as the affordably question, potential credit worthy buyers who are unable to gain access to mortgages for their first properties could also be making up this gap.

“The industry recognises that first-time buyers play a vital role in stimulating the housing market - they are the ones driving a significant amount of the increased activity in the mortgage arena.

“That’s why it’s important that as an industry we cater to all credit worthy potential buyers and help those looking to become home owners for the first time where we can.”

Lucy Hodge of Vantage Finance said first-time buyers are facing challenges when it comes to securing deals.

She said: “House prices are still on the rise, and we’re seeing a huge amount of activity by investors keen to take on more projects as stock continues to fly.

“That said, it’s also becoming harder for property investors to secure deals and in recent months we’ve noticed a growing number re-thinking their strategies or looking in different geographical areas.

“The challenges are particularly noticeable in auction situations in certain London postcodes, where it's incredibly hard to succeed.

“As a result, we’ve seen short terms loans grow in popularity among investors who want to boost their chances of success in a fast moving market.

“Now more than ever, investor clients will be looking to brokers to support them with robust solutions and sound guidance.

“The opportunities out there for investors are huge, and brokers who can help their clients to act quickly and sensibly will reap the benefits.”

And Karen Bennett, sales and marketing director, commercial mortgages at Shawbrook Bank, added: “The rise in prices indicated by the ONS certainly doesn’t come as a surprise, given the consistently upward trend we’ve witnessed over recent months.

"Inevitably there will be some who greet the news with trepidation, but a burst bubble is by no means a foregone conclusion.

"Provided that property investors, brokers and lenders conduct themselves with an eye to the future – in the full knowledge that base rates will not remain this low for ever – we don’t need to fear what’s ahead.

"Sensibly geared portfolios and a savvy approach to location will allow brokers and their investor clients to make the most of the current property climate, and will stand them in good stead if prices do level out in the not too distant future.”