House prices fell by 0.9 per cent in January, according to the latest Halifax house price index.
The lender’s latest research shows the drop follows four month-on-month house price hikes from last August.
The average UK home is now worth £220,260.
Halifax housing economist Martin Ellis says: “UK house prices continue to be supported by an ongoing shortage of property for sale, low levels of housebuilding, and exceptionally low interest rates. These factors are unlikely to change materially during 2017.
“Nonetheless, weaker economic growth and increasing pressure on spending power, along with affordability constraints, are expected to dampen housing demand, resulting in some downward pressure on annual house price growth during the year.”
EMoov chief executive Russell Quirk says the nation should avoid scaremongering interpretations of the drop.
He says: “There are those that will, of course, see this marginal monthly drop in house prices as a fulfilment of the Armageddon-style prophecies that have plagued the UK market since the start of last year, with many widely predicting a troublesome year ahead for property.
“But these figures demonstrate the robust, Teflon-style nature of the UK market, as, despite a turbulent year for property, it has weathered the storm and continues to see upward price growth both annually and when compared to the last quarter.”
Quirk says the January property market is always lethargic and so the house price drop “should be taken with a pinch of salt, rather than a handful of panic”.
LendInvest chief investment officer Ian Thomas says: “While there will be growth in prices this year, measures in the government’s housing white paper announced today will tackle the gridlock in supply and will ultimately determine the scale of price growth.”