House prices strengthened unexpectedly in December after three successive monthly falls, a survey showed on Monday, but analysts said the rebound was unlikely to signal an end to the housing market slowdown.

Halifax said house prices rose by 1.3 per cent last month, beating forecasts of a 0.5 per cent fall but leaving prices for the fourth quarter 0.8 per cent below their level in the third quarter. The annual increase of 5.2 per cent in 2007 was below the long-term average of 8 per cent for only the second time since 2001, Halifax said.

The pound strengthened after the survey's release, as it gave the Bank of England no new reason to rush for a second cut in interest rates at this week's meeting of the monetary policy committee. Most analysts expect the MPC to wait until February to make its next move, when it updates its economic forecasts in its inflation report.

The survey contrasts with other recent data showing lower mortgage approvals and month on month price falls. Analysts said its findings could not be taken as a sign that the housing market was stabilising, although they might moderate expectations of the extent to which prices could fall.

Ed Stansfield, property economist at Capital Economics, said it could be tempting to relate the bounce in prices to December's cut in interest rates, but that it seemed "unlikely that the cut would have had such a pronounced and rapid impact, especially as not all lenders have passed it on to borrowers."

Monthly readings on the Halifax index can be highly volatile, and the lender said a mixed pattern of monthly price rises and falls was typical in a subdued market.

"With buyer traffic and mortgage approvals down sharply and buyers as eager to buy a house as they are to catch a falling knife, this is probably a blip in an otherwise downward trend," said Alan Clarke, economist at BNP Paribas.

"This bounce in prices... reflects the point that even in bear markets, prices do not fall every month, and the declines of the last few months were very sharp," said Michael Saunders, economist at Citigroup. "With housing demand weakening sharply, we continue to expect house prices to fall outright in 2008, contributing to a further marked slowdown in consumer spending."