8 Jan

House prices up 1.3% in December

House prices up 1.3% in December

House prices defied predictions of an impending property by crash to record a rise during December, according to a new study.

Halifax' latest house price index indicates that the price of a home grew by 1.3 per cent during December.

This equates to a rise of £2,500 and brings the average price of a property to £197,000.

The rise comes in the wake of three months of consecutive falls, meaning that the annual level of house price inflation for the period was pegged at 5.2 per cent.

Martin Ellis, chief economist at Halifax, said that he refused to read too much into December's figure and said that such price fluctuations were fairly typical of subdued property markets.

He explained: 'The housing market continued to slow in the final quarter of 2007 with prices slightly lower than in the preceding quarter.

"Higher mortgage repayments in response to the series of five interest rate increases between August 2006 and July 2007 and falling real earnings have put pressure on households' income, resulting in a slowdown in both house price growth and activity in recent months."

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