The December UK house price index statistics produced by Communities and Local Government, released today, showed that house prices were 2.9% higher than a year earlier.

Other highlights were:

• UK house prices were 0.8 per cent higher than in November 2009 (seasonally adjusted).
• The mix-adjusted average house price in the UK stood at £200,307 in December 2009 (not seasonally adjusted).
• UK house prices rose by 2.9 per cent in the quarter ending December 2009. This compares with a larger rise of 3.1 per cent for the quarter ending September 2009 (seasonally adjusted).
• Annual average house prices rose in England (3.0 per cent), Scotland (3.8 per cent) and Wales (1.0 per cent), but fell in Northern Ireland (-6.0 per cent).
• Annual average house prices paid by first time buyers in December 2009 were 6.8 per cent higher than a year ago. Average house prices paid by former owner occupiers were 1.4 per cent higher.
• Annual average house prices paid for new properties in December 2009 were 1.5 per cent lower than a year ago. Average house prices paid on pre-owned dwellings were 3.2 per cent higher.

RICS chief economist Simon Rubinsohn commented: "The latest data on house prices from CLG provides further evidence of the recovery in the residential market. Land Registry numbers show a broadly similar picture and, significantly, the latest figures from the Bank of England show the cost of mortgage finance to be easing. This, alongside some tentative signs that money is becoming a little more freely available should help to continue to push prices higher for at least the next few months. Our own survey reflects a similar pattern with optimism on house prices rebounding smartly during January.

"However, although things are looking better at the moment, the second half of the year is likely to be more challenging again. Not only is the cost of secured borrowing likely to move higher, but the pre-announced increase in the top tax rate will begin to bite. Further fiscal tightening could also be announced after the general election. As a result, we suspect that the price trend is likely to stabilise and possibly turn down in the latter part of 2010."