House price inflation stalled during January as the cost of property at the top end of the market in London and the South-East continued to fall, figures showed today.

Property web site hometrack said rises had been steadily slowing since they peaked at 2.6 per cent in May and the cost of property rose by only 0.1 per cent in January, the same as December's increase.

It added the figure masked contrasting fortunes for different regions, and while prices fell by 0.4 per cent in parts of London, other areas of the country saw them rise by 0.5 per cent.

The group said it did not expect the market to crash as property remained affordable outside the capital and the South-East, and interest rates and unemployment were still low.

John Wriglesworth, hometrack's housing economist, said: "The housing market is stagnating and, as yet, there is no evidence of any green shoots that would indicate a spring recovery.

"London prices continue to fall, especially at the top end of the market. Meanwhile, all other regions are still rising, albeit at a slower rate than six months ago."

During the month prices fell by 0.4 per cent in central London and the City, while in Berkshire, south-east London and west London, they dropped 0.1 per cent.

By contrast, prices rose by 0.5 per cent in Derbyshire and 0.4 per cent in Cornwall and Leicestershire.

Hometrack said the average cost of a home in the 20 counties that saw the highest price rises during January was £119,531, while the average price in the 20 worst performing counties was £180,361, suggesting the slowdown was stemming from the top end of the market.

The group predicted house prices would rise by four per cent this year.