Average house in Yorkshire cost £205,466 in December, says Halifax

However, the Halifax’s research also concluded that the annual rate of house price growth more than halved, to 2.0 per cent in December, from 4.6 per cent in November. Some housing market experts said that an annual fall in house prices could soon take place. Across the UK, the average house price in December was £281,272.

Kim Kinnaird, director, Halifax Mortgages, said: “As we’ve seen over the past few months, uncertainties about the extent to which cost-of-living increases will impact household bills, alongside rising interest rates, is leading to an overall slowing of the market.

“The housing market was a mixed picture in 2022. We saw rapid house price growth during the first six months, followed by a plateau in the summer before prices began to fall from September, as the impact of cost-of-living pressures, coupled with a rising rates environment, began to take effect on household finances and demand.

“These trends need to be viewed in the context of historic prices. The cost of the average home remains high – greater than it was at the start of 2022 and over 11 per cent more than house prices at the beginning of 2021.

“The first half of last year was a very strong period for sellers, between January 2022 and August 2022, the average cost of a home rose by over £17,000 to £293,992, setting a new record high.

“As we enter 2023, the housing market will continue to be impacted by the wider economic environment and, as buyers and sellers remain cautious, we expect there will be a reduction in both supply and demand overall, with house prices forecast to fall around 8 per cent over the course of the year.

“It’s important to recognise that a drop of 8 per cent would mean the cost of the average property returning to April 2021 prices, which still remains significantly above pre-pandemic levels.”

Tom Bill, head of UK residential research at estate agent Knight Frank, said: “The latest data shows two things are happening at the same time. First, the effect of the mini-budget is working its way through the system, which means that monthly declines are narrowing.

“At the same time, an annual fall in house prices appears imminent, underlining how the lending landscape has changed irrespective of the mini-budget.