House prices in Monmouthshire increased in January, rising more than the average across Wales, new figures show.

Figures from the Office for National Statistics show the average Monmouthshire house price in the year to January was £337,495 – a 1.6% increase on December.

It was higher the average across Wales, where prices increased by 0.9%.

The rise in Monmouthshire contributes to the longer-term trend in the area, which has seen property prices in the area grow by 6.6% over the last year.

It means the area ranked fifth among Wales’s 22 local authorities for annual growth, with the average price in Monmouthshire rising by £21,000 over the past year.

The highest annual growth in Wales was in Wrexham, where property prices increased on average by 8.6%.

At the other end of the scale, properties in Merthyr Tydfil lost 6% of their value.

Across the UK, average house prices in January increased slightly on the month before, and have accelerated by 4.9% over the past year.

Separate figures from the ONS show the Consumer Prices Index (CPI) inflation fell to 2.8% in February, down from 3% in January.

The drop was stronger than analysts had predicted, with 2.9% initially forecasted for February.

David Hollingworth, associate director at L&C Mortgages, said the slowing in inflation "can have positive implications for mortgage rates if it helps to boost the market’s outlook for interest rate movements".

Although he said this "should undoubtedly be seen as good news", he warned the rate of inflation is likely to accelerate again in the next few months.

Mark Eaton, chief operating officer at lender April Mortgages, welcomed the drop in the inflation rate, but said it will not immediately increase buyers' ability to save for a house deposit.

And Tom Bill, head of UK residential research at Knight Frank, cautioned: "House prices should continue to rise faster in relatively more affordable parts of the country."