UK house prices continue to rise, as in January values were 6.8 per cent higher compared with a year ago, a new report reveals.

According to freshbusinessthinking.com, the figures from the Office for National Statistics (ONS) show that the biggest increases were seen in England, as prices rocketed by 7.1 per cent. London is continuing to lead the way though, as in the capital prices were 13.2 per cent higher in January than they were the same time the previous year. Scottish homeowners saw the smallest annual rise, with values increasing by just 1.4 per cent.

Jonathan Harris, director of mortgage broker Anderson Harris, says the housing market continues to improve:

“Rising property prices are a concern for buyers, particularly first-timers who have saved hard for a modest deposit and are worried about being priced out further,” he explains to bbc.co.uk.

“The lack of stock is the main issue and while the Budget emphasised the need to build more homes, they simply can’t be built quickly enough.”

A separate report by the British Bankers’ Association (BBA) reveals that mortgage lending in February received a boost too. Homebuyers borrowed £11.5 billion last month, an increase of 47 per cent compared to the same period last year. Although less mortgages were approved last month compared to the previous month, some 47,550 loans were still given to buyers.