House prices in the last three months (November to January) were 2.2% higher than in the preceding three months, and up 1.7% in January alone, according to the latest house price index from Halifax.

The lender recorded a healthy 9.7% rise in prices in the three months to January compared to the same three months a year earlier, taking the average house price in the UK to £212,430.

Martin Ellis, Halifax housing economist, said: “The imbalance between supply and demand continues to exert significant upward pressure on house prices. This situation looks set to persist over the coming months. Further ahead, increasing affordability issues, as price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease.”

Confidence in the housing market remains strong, according to the latest quarterly Halifax Housing Market Confidence Tracker, released earlier this week, which revealed that a majority of people believe that average UK house prices will be higher 12 months from now.

Adrian Whittaker, sales director of New Street Mortgages, said: “Clearly these figures from the Halifax confirm that rising demand and a limited supply of housing is continuing to drive competition in the property market.

“To keep on top of this ever more competitive environment, lenders need to develop innovative new mortgage products that can better address the regional challenges borrowers face across the country and secure the properties they want.”