According to government data, annual growth was 9.8 per cent. This was a softening of the 10.3 per cent yearly increase reported in November.
In England, average house prices fell by 0.2 per cent to £315,119. Annually, this was a 10.3 per cent rise.
The East Midlands experienced the largest yearly increase in house prices, with a 12.3 per cent growth taking the average value to £256,159. This was followed by the North West, which increased by 12.2 per cent to £221,101.
London saw the lowest year-on-year growth of 6.7 per cent to £543,099.
House prices in Wales have increased by 0.7 per cent since November to £222,402. On a yearly basis, this represented a 10.3 per cent uplift.
In Scotland and Northern Ireland, annual increases of 5.7 per cent and 10.2 per cent took average house prices to £187,224 and £175,234 respectively. On a monthly basis, these were declines of 2.9 per cent in Scotland and 0.5 per cent in Northern Ireland.
First-time buyers paid 10 per cent more for their properties than they did last year, at an average of £245,958 in December. Compared to November, this was a decline of 0.3 per cent.
Homeowners paid £343,953 on average in December, an annual rise of 9.6 per cent and a monthly drop of 0.6 per cent.
No crash to be seen
Although the decline in house prices was acknowledged, industry figures said the softer falls in value suggested there would not be a crash, but a correction.
Sofia Jones, managing director at Penny House, said: “I think we will see less of a property crash than many have been predicting. A correction is looking increasingly likely.”
Jones said with inflation “edging down more than expected” we were likely to be at the top of the base rate increase cycle.
She said if rates were cut to stimulate the economy, house prices would be supported and demand would return.
She added: “Given the lack of supply, prices are unlikely to fall as much as we all felt back in October when the fallout from the mini Budget was intense.”
Sharon Hewitt, managing director of Chiltern Relocation, said: “Prices may be nudging down but we are not witnessing the sharp slowdown many predicted. On the contrary, we have received more enquiries at the start of the year than last year and, in our daily conversations with estate agents, they are happily reporting a strong start to the year with higher viewings levels than they expected.”
Zaid Patel, director at Highcastle Estates, added: “Though this data shows that prices are slowly edging down, properties are still selling and the market hasn’t collapsed.
“There is still activity but estate agents and mortgage brokers need to play a big part to educate sellers and buyers on the housing market’s current status to manage their expectations.”
