UK property prices in the fourth quarter of 2015 were 9.5% higher than the same period in 2014, according to the Halifax.
Prices for October to December 2015 were 1.6 per cent higher than in the preceding three months.
The average UK property now costs £208,286.
Halifax housing economist Martin Ellis says that the three months ending December 2015 was the second successive quarter that property price growth was below 2%.
This could herald a slight softening in the underlying rate of price growth, he adds.
“There remains, however, a substantial gap between demand and supply with the latest figures showing a further decline in the number of properties available for sale,” he says.
“This situation is unlikely to change significantly in the short-term, resulting in continuing upward pressure on prices.”