A slight rise in house prices in December failed to prevent annual growth hitting a 13-month low, according to official figures.

The average price of a UK house in the month rose by 0.4% to £219,591 from £218,662 in November, the Department for Communities and Local Government (DCLG) said.

But annual house price inflation dipped to its lowest level since November 2006, at 9.1% down from 9.7% in November.

It is the second consecutive month that the DCLG'S annual growth rate fell, and it provides the latest evidence that the housing market is slowing down.

It comes after Britain's biggest mortgage lender Halifax, which uses more recent data, said house prices held firm during January and that the annual rate of growth also continued to fall.

The DCLG figures showed average UK house prices were lower in December than in September and October.

Ed Stansfield, property economist at Capital Economics, said the data confirmed the market cooled "sharply" in the last months of 2007.

He said: "Over the previous five Decembers, prices have risen by an average of more than 1% month on month. The annual inflation rate fell to 9.1% in December, down from 12.4% in the summer.

"Thus the data simply confirms that the market cooled sharply in the final months of last year."

And he added that the recent cut in interest rates from the Bank of England - taking rates down to 5.25% from 5.5% - would not have a marked impact on housing market confidence as not all mortgage products would be cheaper due to scarcity of funds.

The rise in the price of the average house in the UK in December made back some of the 0.7% fall in November.

The increase was driven by rises for detached houses (1%), terraced houses (0.6%), flats (0.5%) and semi-detached houses (0.2%). A 2.3% fall in the price of bungalows partially offset the growth.

Copyright © PA Business 2008