House prices in the UK rose at their slowest annual pace in 15 months in December, the Office of the Deputy Prime Minister said yesterday.

Prices rose 10.7 per cent in December compared with 13.7 per cent in the 12 months to November - the lowest level since comparable records began in September 2003.

The average house price was down slightly to £178,906 (€260,686) in December from £180,126 in the prior month.

"This measure of house prices points to a cooling in the UK housing market. However, this is one of the less closely observed indicators of house price inflation," said Mr Richard McGuire, strategist at RBC Capital Markets.

Annual house price inflation in London, which tends to lead overall trends in housing, slipped to 3 per cent in December from 7 per cent in November.

The average price paid by first-time buyers across the whole of the UK was £145,408, while the price paid by existing owner occupiers was £197,059, the report said.

Housing costs in Northern Ireland are only half what they are in London, the figures showed.

Both mortgages and rents were 50 per cent cheaper in the North than in London, according to experts at the Office of National Statistics.

Northern Ireland was the only UK region to show an increase in annual house price inflation in December - up to 16 per cent from 13 per cent in November - but the average cost of buying a property in Northern Ireland was £119,261, compared to £257,195 in London. - (Reuters/PA)