House prices drop in December

UK house prices fell by 1.3 per cent in December from the previous month, according to figures from the Halifax.

The lender said the average property ended the year 1.6 per cent lower than at the beginning of 2010.

But it said the decline was less than falls seen in the second half of 2008.

Halifax said it expected "limited movement in house prices during 2011" as interest rates were "likely to remain very low for some time".

The average UK house price now stands at £162,435, Halifax said.

The three-month on three-month comparison in prices, showed that prices were down 0.9 per cent in the three months to December compared with the previous quarter.

Halifax housing economist Martin Ellis said: "Current signs that homeowners are becoming more reluctant to sell would, if continued, help reverse the imbalance between buyers and sellers.

"Nonetheless, uncertainty about the economy, weak earnings growth and higher taxes could put some downward pressure on demand."