UK house prices increased by 1.3 per cent in December, according to the Halifax house price index.

As such, at the end of 2007 the standardised average price for a property was £197,039.

The rise came after three successive monthly falls and reflected a 5.2 per cent rise on December 2006, with prices rising by £11,759 during the 12-month period.

Chief economist at the firm Martin Ellis states: "Overall, the housing market continued to slow in the final quarter of 2007 with prices slightly lower than in the preceding quarter."

He adds that house prices are predicted to be "flat" over the course of 2008 and that the interest rates are likely to be cut on at least two occasions during the year.

Commenting on the data, the Royal Institution of Chartered Surveyors notes that the rise in December came as a surprise when taking into account the three consecutive monthly declines the preceded it.