British house price inflation fell sharply at the end of last year despite a rally in December, according to the Halifax bank.
HBOS's Halifax survey showed house prices rose 1.3 per cent on the month, taking the three-month rate of inflation compared with a year earlier to 5.2 per cent, the lowest in nearly two years, and the average house price to £197,039 sterling (€264,822).
The country's biggest mortgage lender said prices were rising at an annual rate of just 5.2 per cent in December, half the rate seen just three months earlier.
Analysts had forecast a fall of 0.5 per cent on the month and a decline in the three-month rate of house price inflation to 4.9 per cent.
The findings contrasted with other recent surveys that have shown month-on-month house price falls. Nationwide reported a 0.5 per cent fall in house prices last month following a 0.8 per cent decline in November.
However, Halifax revised down the prior month's reading to show a 1.3 per cent fall - from a 1.1 per cent fall previously - meaning December's recovery merely erased November's losses.
Halifax said house prices in 2007 as a whole rose by 5.2 per cent, which it said was only the second year since 2001 that prices had risen by less than the long-term average of 8 per cent.