LONDON, Jan 5 Reuters British house prices rose in annual terms in December for the first time in eight months, data from mortgage lender Halifax showed on Friday, adding to signs of a stabilisation in the property market after a hit from higher borrowing costs.

House prices were 1.7 higher than in December 2022 when the market was hammered by the minibudget crisis of former Prime Minister Liz Truss.

In monthly terms, prices rose by 1.1 from November, Halifax said.

Britain39;s housing market boomed during the COVID19 pandemic before demand fell as the Bank of England pushed up interest rates to counter a surge in inflation across the economy.

However, a fall in mortgage rates in recent weeks has prompted some buyers to return to the market.

BoE data published on Thursday showed lenders approved the most mortgages in November since June.

Kim Kinnaird, director at Halifax Mortgages, said December39;s price rise was probably driven mostly by a lack of properties on for sale but the fall in mortgage rates raised the possibility of increased confidence among buyers in early 2024.

Our latest forecast suggests house prices could fall between 2 and 4 during the coming year, although, as with recent years, forecast uncertainty remains high given the current economic climate, Kinnaird said.

Imogen Pattison, an economist with Capital Economics, said the fullyear increase in prices was helped by a 1.4 monthly fall in December 2022, shortly after the minibudget crisis hit…