HOUSE prices in Oxfordshire rose by 1.6 per cent last year, official figures released yesterday revealed.

Statistics from the Government’s Land Registry show the average price of a property in the county in December was £228,317 – £3,624 more than the same month the previous year.

It is the first time there has been an annual rise in the figures since June 2008, when an average Oxfordshire house cost £244,480.

December’s rise of 0.4 per cent was the seventh month in a row prices have gone up in the county – reflecting a major recovery in the market through the course of last year.

Last March, the average price had dropped by 14.2 per cent year on year and by May was at a low point of £214,551, meaning values have risen by about £2,000 a month since then.

And property experts said prices were rising even more rapidly in so-called “hotspots”, such as North Oxford.

Chris Dixey, sales manager of the Summertown office of estate agents Breckon & Breckon, said: “In the OX2 postcode area, prices have returned to 2007 levels, when the market was at its peak.

“We’re experiencing a real shortage of supply, so when a property comes on the market, there’s a situation where there are competing bids and people are going completely crazy.

“We have just agreed a deal which was 15 per cent over the guide price in central north Oxford.

“What happened was that there was a blip in transactions in 2008 and then people have come back to the market expecting prices to be the same as 2007.”

Mark Charter, head of the Oxford office of estate and land agents Carter Jonas, said the news of an annual rise in prices was no surprise, although he sounded a note of caution for property prices this year.

He added: “We’re predicting an annual increase of up to one per cent over the whole of the year.

“There will be further price increases in the next six months, but there’s some uncertainty over the impact of the General Election and possible interest rate rises later in the year.”

Nationally, the Land Registry figures showed that prices rose by only 0.1 per cent during December, the smallest monthly increase since May last year.

But the average national price of £161,783 was 2.5 per cent up over the course of the year.