UK house prices rose 0.7% month on month in January, according to latest figures.
The data from Nationwide showed prices are now down just 0.2% when compared to last year.
The average house now costs £257,656 compared to £257,443 last year.
Robert Gardner, Nationwide's chief economist, said it was the strongest outturn since January 2023.
“There have been some encouraging signs for potential buyers recently with mortgage rates continuing to trend down.
“This follows a shift in view amongst investors around the future path of Bank Rate, with investors becoming more optimistic that the Bank of England will lower rates in the years ahead."
Gardner added: “While a rapid rebound in activity or house prices in 2024 appears unlikely, the outlook is looking a little more positive.
“How mortgage rates evolve will be crucial, as affordability pressures were the key factor holding back housing market activity in 2023.”