UK house prices grew at their quickest rate for 18 months in January, according to a leading market indicator.

UK house prices grew at their quickest rate for 18 months in January, according to a leading market indicator.

Nationwide's latest house price index showed a monthly increase of 1.4 per cent, bringing the annual rate of growth to 4.4 per cent with three quarters of the annual increase in prices coming in the past four months.

The average price of a house in the UK was found to be £158,478, up from £151,757 last year.

Fionnula Earley, Nationwide's group economist, attributed the current trends to the interest rate cuts in August last year as well as an "increased confidence" among buyers and sellers.

"The continued pick-up in mortgage approvals suggests that the market will strengthen further over the next few months," she said.

Howard Archer, chief economist at consultancy Global Insight, said that increased house price inflation would preclude the Bank of England's monetary policy commitee from cutting interest rates in the coming months.

"The bank will be concerned that a further interest rate cut could excessively boost the housing market and risk sending house prices even higher," he said.

Another house price index, from property website Hometrack, showed house values grew by 0.1 per cent in January.