The latest Land Registry house price index reports that last year ended on a solid note with average increases of 0.7% in December, taking house prices to £173,717 at the end of the year.

The past year has seen greater house price appreciation than that witnessed throughout 2005, said the report. During the last three months of 2005 the rate of annual change in house prices averaged 3.3%. For the last three months of 2006 the same figure was 7.2%.

London once again represents the main driving force behind the recent house price growth.

The rate of annual increase in London’s house prices has been greater than that of England and Wales since March 2006. London’s annual growth this month is 10.4% compared with the 7.8% increase of England and Wales as a whole.

 Price change by region

All regions in England and Wales experienced average price increases over the last twelve months.

• The region with the highest annual price change is London with an increase of 10.4%.
• The region with the lowest annual price rise is the North East, with an increase of 4.5%.
• London experienced the highest monthly change, with an increase of 2.0%.
• The East and the North East were the only regions to experience negative monthly price changes with movements of -0.3 and -1.6% respectively.

Lower-priced volumes declining

There were just 1,116 houses or flats sold for under £50,000 in England and Wales during October (the last month for which figures are available) - a drop of 42% on the year before.

And in London the number of homes selling for less than £150,000 dropped by 29% over the previous 12 months to just 1,075.