House prices bounced back further last month as lower mortgage rates fuelled a revival in the property market.
The average home increased in value by 1.1pc in December compared to November, according to the Halifax house price index.
It was the third monthly gain in a row after six consecutive falls before that.
It means a typical home is worth £287,105, up more than £3,000 on the previous month.
The increase in prices comes as lenders cut mortgage rates amid expectations that the Bank of England will cut interest rates this year, with several major banks starting the year by offering rates below 4pc.
However, Kim Kinnaird, director at Halifax Mortgages, said: “The growth we have seen is likely being driven by a shortage of properties on the market, rather than the strength of buyer demand.
“That said, with mortgage rates continuing to ease, we may see an increase in confidence from buyers over the coming months.”
Halifax said that overall property prices increased by 1.7pc in 2023 but predicted prices will fall by between 2pc and 4pc this year.
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What happened overnight
Asian shares mostly declined, after a mixed finish on Wall Street, although export-related Tokyo stocks got a boost from a weakening yen.
Benchmarks rose in Tokyo but fell in Sydney, Seoul, Hong Kong and Shanghai.
The yen has weakened amid speculation that the Bank of Japan might go slowly on changing its lax policy stance as it assesses the impact of Monday’s major earthquake in central Japan.
The US dollar rose to 145.23 Japanese yen from 144.63 yen. The euro fell to $1.0930 from $1.0947. It dropped 0.4pc to 184 to the pound.
Japan’s benchmark Nikkei 225 added 0.3pc to 33,377.42.
Hong Kong’s Hang Seng shed 0.9pc to 16,490.92, while the Shanghai Composite sank 1pc to 2,926.32.
Australia’s S&P/ASX 200 shed nearly 0.1pc to 7,489.10. South Korea’s Kospi lost 0.4pc to 2,578.08.
American shares are having a tricky start to the year, with the S&P 500 experiencing its worst new year since 2015 with three consecutive days of decline.
The index lost 0.3pc to end at 4,688.68 points on Thursday, while the Nasdaq Composite index (heavily weighted towards technology companies) lost 0.6pc, closing at 14,510.3. The Dow Jones Industrial Average of 30 leading US companies was flat at 37,440.34.
The yield on 10-year US Treasury bonds jumped to 4pc in a sharp reversal from last week, when the benchmark note slid to a five-month low of 3.78pc on recent data showing inflation by some measures had declined close to the Fed’s 2pc target.