House prices 'rose 2.9% in 2009'

House prices rose by 2.9% in 2009 and 0.8% in December, according to the latest Government figures.

Prices have now increased for the eighth consecutive month as measured by the Communities and Local Government (CLG) index and in December, the average UK house price was £200,307. 

For the quarter ending December 2009, UK house prices rose by 2.9%, a slight decrease compared to the 3.1% rise in the quarter ending September 2009.

On an annual basis, the average house price rose in England by 3% to reach £206,694, rose by 3.8% in Scotland to reach £160,249 and increased by 1% in Wales to reach £150,481. But, prices in Northern Ireland experienced a 6% fall to drop to £175,170.

In December, London had the highest average house price at £316,695 while the lowest average price was in the North East at £140,551. Of the English regions, the East, London, the South East and the South West had average prices above the UK average.

The average price paid by first-time-buyers across the UK was £149,699 in December, a rise of 2.8% from November.

Simon Rubinsohn, Royal Institution of Chartered Surveyors (RICS) chief economist, says the data provides further evidence of the recovery in the residential market.

"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," he says.