House prices rose in December after thee months of consecutive falls, new figures compiled by the Halifax have revealed.

While the lender continues to predict that 2008 will be a flat year for the housing market, it said that prices edged upwards by 1.3 per cent from November to December, with the average cost of a home now standing at £197,039.

Prices rose by a total of 5.2 per cent between December 2006 and December 2007, representing a £11,759 year-on-year increase.

Martin Ellis, chief economist at the Halifax, said that the rise had "[reversed] some of the declines recorded in the preceding three months".

"This mixed pattern of monthly price rises and falls is a typical characteristic of a subdued market," he commented, adding that house prices will be supported in 2008 by "sound economic fundamentals and lower interest rates".

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said the increase "came as a surprise".

"Our suspicion is that the market environment is likely to remain challenging for at the least the first half of this year and that activity levels will remain subdued," he predicted.