Unexpected Rise In House Prices

House prices rose unexpectedly in December by just over 1 per cent, although they are expected to remain fairly flat this year, according to new figures from the Halifax.

In December the average price of a house was £163,845, with the figure, when measured on a quarterly basis, up for the first time in seven months amid signs of a firming in housing market towards the end of 2012. Prices also rose 0.6 per cent in the three months from October to December.

There were six monthly rises and six decreases during 2012 as underlying prices remained little changed over the course of last year, the mortgage lender added.

In general, surveys show that London and the South East of England have seen price rises, but there have been falls elsewhere, notably in Northern Ireland.

According to the Halifax, the picture for this year is ambiguous, as there were few clear signs of direction in 2012. Last year saw an even mix of monthly rises and falls as prices lacked any real direction as both demand and supply pressures remained largely unchanged during the year.

However, this month, the Nationwide Building Society said that UK house prices fell by 1 per cent on average in 2012, but this is because the way the two lenders calculate the annual rate of change differs slightly.

The Halifax compares the average house price over the past three months with the average for the same three-month period the year before, while the Nationwide conducts a straightforward monthly year-on-year comparison, which could be affected by short-term blips. However, the Nationwide also expects prices to remain static in 2013, saying that conditions in the housing market remain “fragile”.