House prices increased 1% to £169,042 in December, marking the sixth consecutive rise in prices over the last year.

Prices also saw the first annual increase since March 2008, with prices up 1.1%.

Martin Ellis, housing economist for Halifax, says: “The significant cut in interest rates following the worldwide financial upheaval in the autumn of 2008 has markedly reduced the burden of servicing a mortgage for many households. This has helped to stimulate housing demand, albeit from a low base. The recent improvement in the labour market, highlighted by increasing numbers of people in employment in both September and October, has also supported housing demand.

“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.”