The 1% rise brought the average house price to £169,042. House prices have risen by 9.4% since reaching a low in April 2009 and Halifax believes house prices will be flat during 2010.
Prices in December were 1.1% higher on an annual basis, marking the first annual rise since March 2008. Prices in the final three months of 2009 were 3.5% higher than in the third quarter, the biggest quarterly increase since Q4 2006. This was the second successive quarterly rise and follows falls in the first two quarters of 2009.
Martin Ellis, housing economist at Halifax, said the cut in interest rates following the worldwide financial upheaval in the autumn of 2008 has helped to stimulate housing demand and reduced the burden of servicing a mortgage for many households.
He added: “The recent improvement in the labour market, highlighted by increasing numbers of people in employment in both September and October, has also supported housing demand. The prospects for the market this year will depend on how the UK economy evolves and whether there is a significant increase in the supply of properties for sale.”
