HOUSE prices across the UK rose by 0.1 per cent last month, with the value of an average house rising to £85,666, said the Halifax.

But prices are only 0.9 per cent higher than at the same point last year - a substantial decline in the annual rate of growth.

In December, the Halifax said house prices were 3.1 per cent higher than they were in December 1999.

The decline in the annual rate was attributed to substantial monthly price increases seen in January last year, when the property market began to enter a mini-boom, said the Halifax.

But the Halifax stressed that the decline was in line with expectations, with underlying growth broadly stable.

Prices in the three months from November 2000 to last month were unchanged against the preceding three months.

"Housing affordability levels continue to be closely in line with long-term averages nationally," the bank said.

The rise in price to £85,666 compares with an average house price in January last year of £84,867.

But for the members of the Bank of England's Monetary Policy Committee, who meet this week to decide UK interest rates, gauging the health of the housing market is anything but clear-cut.

Earlier this month, a similar survey by the Nationwide Building Society showed house prices had risen by 2.5 per cent in January and were up 11.2 per cent when compared with a year ago