New figures show that the UK’s average house price fell by 1.3% in 2011 after a monthly decline of 0.9% between November and December.
Lender Halifax said that as prices had “held up” well during the year, it was hopeful of a similar performance in 2012 if the UK could avoid recession.
Halifax housing economist Martin Ellis said: “There is, however, considerable uncertainty regarding the prospects for the UK economy which will, to a large extent, depend on how events in the euro zone unfold.”
The average house price at the end of 2011 stood at £160,063, with prices down 0.1% in the final quarter after falls in November and December offset a 1.2% rise in October.
Mr Ellis added: “Whilst there was a modest fall overall in prices during 2011 with an annual decline of 1.3% in December, house prices held up well last year in the face of the difficult and deteriorating economic climate and substantial pressure on households’ finances.”
Halifax said there was a mixed picture during 2011 with six monthly falls, five increases and one month of unchanged prices.
But there was an improvement in the annual rate from a decline of 4.2% in May to a drop of 1.3% at the end of the year.