The latest Land Registry House Price Index shows an annual house price increase of 7.0%, bringing the average house price in England and Wales to £177,766.
The December data shows a monthly price increase of 0.6%, higher than Nationwide's Index which found a rise of 0.2%.
The data also found that the number of property transactions has increased over the last year. From July to October there was an average of 82,067 sales per month compared to 75,201 in the same months a year earlier.
The December data for London shows a monthly increase of 1.8%. At 16.3%, the annual change for London is considerably higher than other regions. The average price of property in the capital now stands at £464,936 in comparison with an average of £177,766 across England and Wales.
The London borough with the highest annual price rise is Waltham Forest, with a movement of 25.1%, whilst Newham experienced the highest monthly increase at 1.6%.
Kensington and Chelsea saw the lowest annual growth of 11.5%.
In other regions, the North West saw the lowest annual price growth with a movement of 1.5% and also saw the largest monthly decrease with a fall of 1.6%.
The number of properties sold in England and Wales for over £1 million in October 2014 increased by 15% to 1,132 from 984 in October 2013.
Guy Meacock of buying agency Prime Purchase, says:
"With a monthly increase of 1.8% in London, this brings the annual change in house prices for the capital to 16.3%, which is considerably higher than any other region. However, within London the boroughs are behaving quite differently. Kensington and Chelsea saw a monthly drop of 0.6%, for example, while Newham and Hillingdon saw rises of 1.6 and 1.5% respectively. An average is therefore quite unhelpful. It is always worth remembering that the Land Registry doesn’t include transactions bought in trust names or corporate entities, as many of these are not recorded.
"Stamp duty changes introduced in December are set to benefit the mainstream market but are also having a positive impact higher up the chain. Removing the slab system has taken away some pressure up to and the other side of certain price brackets, particularly the £2m one. It is also becoming apparent that the extra stamp duty will come off the purchase price so it is not so much an issue for the buyer as for the vendor. Ultimately, it is being negotiated into the price the buyer pays.
"Despite the slowdown in house price growth, there is still some confidence among buyers and sellers with interest rates likely to remain low for the foreseeable future."
Mark Harris, chief executive of mortgage broker SPF Private Clients, added:
"The Land Registry is just the latest index to show that house-price growth is slowing ad with the BBA pointing to a dip in lending as well, the market is definitely more subdued. That said, the CML pointed out that 2014 was the best year for mortgage lending since 2008 and while we expect the housing market to be quieter over the next few months, we still predict lending in the region of £215bn for the year, compared with £205bn last year.
"While first-time buyers were a key driver of the market last year, we expect the remortgaging market to be strong over the next 12 months with borrowers not so much fearing a rate rise but enticed by some of the astonishingly cheap deals now available.
"With this month’s minutes from the Monetary Policy Committee revealing that the Bank of England’s two hawks have dropped their calls for an interest rate rise, it seems unlikely that we will see rates go up this year, or even next. With inflation falling to 0.5% in December, it’s lowest level in nearly 15 years, the pressure is off the rate setters to move rates.
"Lenders have already reacted to falling Swap rates with record low mortgage rates. With ten-year fixes now available from just 2.94%, an exceptionally cheap deal for such certainty, more and more borrowers will be tempted to commit for the longer term. The next step is for lenders to start easing criteria rather than cutting rates, a move we hope to see this year."