The second monthly decline experienced by the index left the average price of a UK property at just £8,334 higher than one year ago.
In addition, the three-month on three-month rate of growth – a smoother indicator of house price trends – fell from 1.4 per cent in November to 0.9 per cent in December, the lowest since November 2005.
The lender said that whilst rate cuts will help ease the burden of mortgage repayments in 2008, it is unlikely that they will re-ignite the housing market in the same way as back in 2005.
