House prices fell in December for the first time since last January, but will continue to rise for the rest of the year, according to mortgage lender Halifax.

In its monthly index, Halifax found the average price of a house dropped by 0.2% - the equivalent of £150 off the price of a £75 000 property.

The fall marks the slowing down of annual house price inflation to the lowest rate since June 1996. Inflation dropped from 6.1% to 4.3%.

Halifax said the figures did not mark an end to the recovery in house prices because the slight drop followed a sharp rise in November last year, when prices shot up 0.9%.

The company said: "We continue to believe that the modest recovery started in 1997 will continue into 1998 and that house prices will end the year around 5% higher than their present level."

First time buyers got the best bargains in December, with prices falling 2%.

Prices for first homes ended the year only 2.5% higher than a year ago.

The average price in December for a first home was £49,377.

Newly-built prices saw a sharp rise in the month to an average price of £74,524. The three-month trend shows a 3% rise in prices and an annual inflation rate of 7.7%.

Prices for new houses are said to be "volatile".
 

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