Nationwide’s own survey reported a 1.2% price increase in January, taking the rise to 8.6 per cent since the start of 2009.

According to Nationwide’s house price index, the average UK house is now valued at £163,481, up from a low of £147,746 in February 2009 but still well below the peak in October 2007 when the average stood at £186,044.

Nationwide chief economist Martin Gahbauer said: “Unless there is a fall in property values in February, annual house price inflation is likely to move into double-digit territory next month.”

The Nationwide index is based on mortgage lending and separate figures from the UK Land Registry, which bases its valuations on all registered housing transactions in England and Wales show that in December annual house prices rose by 0.1 per cent over the month — the eighth consecutive monthly increase, according to the official measure.

Meanwhile for first time buyers the size of deposit that is being demanded by lenders, which has risen by 124% in two years according to research by Hometrack, is excluding thousands from the market.

The price of the average flat in Britain currently stands at £135,343 which is 10% lower than the 2007 peak. But lenders require a least 25% deposit and the typical sum is now £33,383. And a borrower would need an annual wage of £43,600 on top of the deposit to qualify for a mortgage.

The barriers to housing market entry are highest in London and the south east.