Talk of a slowdown in the property market has been temporarily silenced after Halifax reported a 1.1% increase in house prices for December.
The mortgage lender adds that while prices rose 15.1% over 2004, they increased by just 2.8% in the second half of the year.
The last quarterly rise of 0.1% was the lowest since the second quarter of 2000.
December saw the average price of a home in the UK hit £162,086, according to Halifax's figures.
Northern England regions continue to see prices gain, recording the highest price increases in Britain during the fourth quarter.
The North West and Yorkshire and Humber, recorded 3% and 1.2% price increases respectively, while Wales fell most, shedding 6.2%. The South East saw average prices slip 1.6% during the quarter.
Prices in London fell by 0.5%, a second successive quarterly drop for the capital.
Last month, Halifax forecast a 2% fall in house prices for 2005.
Martin Ellis, chief economist at Halifax has defended this figure saying: “Sound housing market fundamentals will continue to underpin the market in 2005, ensuring that the market remains healthy and that house prices fall only slightly.”
He adds that the market will be characterised by modest price increases and a ‘steady improvement’ leading into 2006.
The company says continuing signs of a cool market will reduce the need for the Bank of England to raise interest rates again, predicting that the current 4.75% base rate represents the peak of the cycle, forecasting the base rate falling to 4.25% by year-end.IFAonline
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