According to the lender’s most recent index, house prices across the UK rose by 6% annually but only by 0.2% on a monthly basis.

When measured quarterly, Halifax said prices increased by 2.6% which means the average property in the UK ended the year at £253,374.

Russell Galley, managing director at Halifax, said the lastest rise in prices meant the current run of continuous gains now stretched to six months.

However, he also said the monthly rise of 0.2% was the lowest seen during this period and significantly down on the 1.0% increase in November.

He said: “The average house price was therefore little changed, but nonetheless still reached a fresh record of £253,374.”

A tale of two halves

Galley described 2020 as a ‘tale of two distinct halves’ for the housing market. “Following a strong start, the first half was dominated by the restrictions on movement due to Covid-19, and prices were subsequently down 0.5% at mid-year as the market effectively ground to a halt,” he said.

“However, when the market reopened, prices soared as a result of pent-up demand, a desire amongst buyers for greater space and the time-limited incentive of the stamp duty holiday.

“All this left average prices sitting some 6% higher at the end of 2020 when compared to December 2019, a notably strong performance given the anticipated impact of the pandemic earlier in the year.

“In the near-term, and with mortgage approvals still sitting at a 13-year high, there may be enough residual strength in the market to sustain prices up to the deadline for the stamp duty holiday and the scaling back of Help to Buy at the end of March.

“However, with the pace of the UK’s economic recovery expected to be constrained by the renewed national lockdown, and unemployment widely predicted to rise in the coming months, downward pressure on house prices remains likely as we move through 2021.”

Industry reaction

Commenting on the slowdown, mortgage and property industry pundits thought it might be temporary.

Marc von Grundherr, director of Benham and Reeves, said: “Of course, even in the hottest market conditions, some festive respite is required and so a slow in the rate of house price growth in December should be seen as nothing more than the industry pausing for breath.”

Meanwhile Miles Robinson, head of mortgages at Trussle, said thinks the mini boom will continue despite the lockdown as people strive to take advantage of the stamp duty holiday before its planned end in March.

He said: “We’ve seen huge demand in the market. Mortgage approvals topped 100,000 in November, the highest on record since 2007.

“Additionally, we saw a 48% increase in mortgage submissions from May through to November, compared to the same period in 2019.

“It’s no surprise then, to see that this demand has boosted property prices by 0.2% in December and pushed annual house price growth to a high of 6% in 2020.

“As we enter the new year, there’s no sign of things slowing down, with the market set to remain open despite national restrictions.

“Many are racing to complete transactions ahead of the Stamp Duty holiday deadline on 31 March and we’ve also seen a resurgence of high loan-to-value mortgages.”