House prices leapt by 2.5% in January to mark the biggest monthly upswing for 14 years, Land Registry figures show.

The average house price in England and Wales rose by £4,732 over the month to £191,812.

Yet property experts warn that transactions are low and there are signs the market is slowing due to the buy-to-let tax crackdown and Brexit referendum.

Peter Rollings, chief executive of Marsh & Parsons, said there is plenty of optimism in the property market at the moment, despite uncertainty over the Brexit referendum.

“House prices have made quick progress already in 2016, and this will be a pleasant wake-up call for homeowners considering selling in the spring market.

“First-time buyers and buy-to-let investors are moving at a brisk pace, and while they continue to grossly outnumber properties for sales, house price growth will persist through the wider political uncertainty.”

Rollings said that London remains “in a whole different league”, with property values up 14% annually. 

“Prices have risen across the board in the capital, but the double-digit increases are predominantly concentrated in cheaper boroughs, where buyer demand remains very robust.”

Higher stamp duty on more expensive properties means that the prime central London market is “dragging its heels”, Rollings said.

Jeremy Leaf, a former RICS chairman and north London estate agent, said the decline in number of property transactions is a worry.

“If people aren’t able to move in and out of the market when they want to, there will be an inevitable knock-on effect for the rest of the economy.

“With the high cost of moving, continued shortage of supply and affordability issues with tougher mortgage criteria, this situation looks unlikely to change any time soon.”

Leaf said he had seen a gradual slowdown in the market over the past couple of weeks.

“This is happening in anticipation of the stamp duty increase for investors and second homebuyers but its timing is surprising as we expected it to occur after April.”

Andrew Bridges, managing director of Stirling Ackroyd, said: “It’s essentially a one-horse race-horse race in the house price stakes and London is winning by several lengths.”