UK house prices rose 1% in December, according to the Halifax house price index.

The increase was slightly less than the average increase seen over the previous five months at 1.2%. But Halifax said that prices were now 1.1% higher annually, marking the first increase in the annual rate of change since March 2008. The average house price is now £169,042.

Interest rate cuts, some housing market activity and improved employment figures were supporting the market, Halifax commented.

Housing economist Martin Ellis said: “The prospects for the market this year will depend on how the UK economy evolves and whether there is a significant increase in the supply of properties for sale. Overall, our current view is that house prices will be flat during 2010."