House pirces
UK house prices rose 9.8% in December, Office for National Statistics data showed Reuters

UK house prices rose by 9.8% in December compared to the previous year, slowing from a 9.9% growth in yearly terms in November, the Office for National Statistics said.

The average price was £272,000 in the year to December, down slightly from record highs of £274,000 in August.

The slight reduction is another indicator that the UK housing market could be slowing down. But the situation is becoming harder to predict amid conflicting data from two national indices on released this week.

London prices rose at the fastest rate across the UK, posting growth of 13.3%. House outside of the south east of the country experienced a 7.4% price rise in the 12 months to December 2014.

Prices rose by 10.2% in England, by 5.5% in Scotland, 4.9% in Northern Ireland and 4% in Wales.

Haart, part of Spicerhaart, the UK's biggest independent estate agency group, said on Monday that house prices had fallen in January 2015, with the biggest decline coming in London.

It said prices in the capital had fallen back to the level they had in January 2014, with the wealthy boroughs of Kensington and Chelsea, as well as Camden, reporting annual declines.

At the same time, the property portal Rightmove said house prices had rose on average by 2.1% in January from the previous month.

While concerns remain about an overheating housing market, especially in the capital and the South East, the news of prices going up will be a boost to the government.

The huge increase in house prices is in stark contrast to wages in the UK, which between August and October nudged up by 1.6%, excluding bonus, on the year before.

Consumers have also seen an improvement in spending power after inflation fell to 0.3% in January - the lowest annual rate on record.