Further evidence that the housing market picked up during January emerged today with the publication of Government figures showing an increase in price growth during the month.

The Office of the Deputy Prime Minister said annual house price inflation rose to 9.7% for the year to the end of January, up from 8.3% for the previous 12 months.

At the same time annual price growth in London, a key indicator of the future direction of the market, rose to 5% up from 3.8% in December. The ODPM said the jump in house price inflation across the whole UK was the result of a 0.6% rise in prices during January, compared with a 0.7% fall during the same month of the previous year, boosting the cost of the average property to £163,645.

Britain's biggest mortgage lender Halifax had previously said house prices surged by 2.2% during January, while property website Rightmove said prices rose by an average of £2,000 during the first week of the year alone.

Today's figures show that price growth remains strongest in northern England, with annual house price inflation running at 26.7% in the North East, 20% in the North West and 19.7% in Yorkshire and Humberside, while growth was also strong in Scotland at 23.3%.

By contrast price growth was subdued in southern regions, with annual house price inflation falling to 4% from 7.7% in the East, and increasing only slightly to 5.2% in the South East.

Unsurprisingly, London remains the most expensive place to buy a property, with prices there averaging £242,555, followed by the South East at £219,320.

The cheapest homes are in Scotland, where property averages £105,129, and the North East at £106,703.

The ODPM said the average price paid by a first-time buyer is now 12.1% higher than it was a year ago at £127,389, while former owner occupiers are paying an average of £188,021.