House prices bounced back further last month as lower mortgage rates fuelled a revival in the property market.

The average home increased in value by 1.1pc in December compared to November, according to the Halifax house price index.

It was the third monthly gain in a row after six consecutive falls before that.

It means a typical home is worth  £287,105, up more than £3,000 on the previous month.

The drop comes as lenders cut mortgage rates amid expectations that the Bank of England will cut interest rates this year, with several major banks starting the year by offering rates below 4pc. 

However, Kim Kinnaird, director at Halifax Mortgages, said: “The growth we have seen is likely being driven by a shortage of properties on the market, rather than the strength of buyer demand. 

“That said, with mortgage rates continuing to ease, we may see an increase in confidence from buyers over the coming months.”

Halifax said that overall property prices increased by 1.7pc in 2023 but predicted prices will fall by between 2pc and 4pc this year.

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