House price inflation in England and Wales has crawled to almost a halt in recent months, according to the Financial Times house price index. Financial Times (Sat)

In December, prices rose by 0.1% – the slowest monthly increase since July 2005 – following a 0.2% rise in November. November’s data were also revised down from the 0.4% initially reported.

House price inflation has been falling since February, when the index recorded a 1.2% rise for the month. The data are in line with other recent house price indices showing slowing growth, if not outright declines, in value of once frothy house prices. The indices have helped to fuel fears of a drop in values in 2008.

But year on year, the overall picture is far less gloomy, with a 7.9% rise through December – well ahead of any measure of UK inflation.

London house prices continued to stand out from other locations in England and Wales, with a rate of inflation almost twice that of the next highest region, the south-east. If London prices are excluded from the assessment, price inflation was flat for the period and the annual rate of increase fell sharply to 5.8%.