UK house prices rose for a third consecutive month in December amid a shortage of properties on the market, but are forecast to drop this year.
Property prices grew by 1.1% in December, after a 0.6% rise in November and a 1.2% increase in October. A typical home in the UK is now worth £287,105, about £3,000 more than in November.
However, the monthly, quarterly and annual growth rates were driven by a shortage of properties on the market rather than strong buyer demand.
Figures released by the Bank of England on Thursday showed that mortgage approvals for house purchases rose to 50,100 in November, from 47,900 in October, pointing to a strengthening of demand.
However, analysts at Goldman Sachs have estimated that UK homeowners are facing a £19bn increase in mortgage costs by the end of next year as millions more fixed-rate deals expire, putting additional strain on household finances.
London remains at the top spot for the highest average house price across all the regions, at £528,798, although prices in the capital have declined by 2.3% annually.
Northern Ireland continues to be the strongest performing nation or region in the UK, with house prices increasing by 4.1% annually. Properties in Northern Ireland now cost on average £192,153.