However, the house price index showed that on a monthly view, prices fell by an average 0.3% since December 2017.
The average property value in the UK stood at £225,621 as of January 2018.
The East Midlands and Scotland saw the greatest change with both growing 7.3% since January 2017, followed by the South West at 6.9%.
The slowest region was the North East at 0.7%, followed by London at 2.1%.
John Eastgate, sales and marketing director at Onesavings Bank, commented: “The uptick in property price growth has softened in recent months, especially in London where the slowdown has had a disproportionate impact on the national picture.
“However, the mortgage market remains steady and growth is expected to continue along a modest path this year.
“With the end of the Term Funding Scheme, a possible May interest rate increase and absence of wage inflation, affordability will continue to be a challenge for potential home buyers.”
Volumes
Sales volumes showed stark falls, with the latest data available revealing that number of sales in the UK fell 11.3% compared to November 2016.
In England, sales volumes fell 13% from 74,097 to 64,454 in November 2017.
Volumes in Scotland fell 1.9% from 8,734 to 8,572, Wales dropped by 5.2% from 4,084 to 3,871, and Northern Ireland slid 8.8% from 6,033 to 5,501.
Richard Snook, senior economist at PwC, said: “Today’s data give the first insight from the ONS and Land Registry figures for 2018 and show a soft start to the year.
“While annual growth is positive, prices actually dropped by more than £600 on average from the previous month taking the price of a typical UK house to £225,621.”
Snook added: “Sales volumes in the UK to November 2017 fell 11% compared to the year before, suggesting that prices could weaken in coming months. We are expecting UK wide house price inflation of around 4% in 2018.”
