House prices fell by 0.8 per cent between March and April, according to the latest Halifax House Price Index.
The average house in April cost £212,321.
House prices in the first quarter of 2016 were 1.5 per cent higher than the preceding quarter.
Halifax say this was the smallest quarterly increase since 1.4 per cent in November 2015.
Halifax housing economist Martin Willis says: “Current market conditions remain very tight as the severe imbalance between supply and demand persists.
“This situation, combined with low interest rates and rising employment and real earnings, should continue to push house prices up over the coming months.
“Weakening sentiment regarding house price prospects and a dip in consumer confidence suggest that annual house price growth may ease.”
The number of UK home sales rose from 116,930 in February to 165,480 in March, the highest monthly total since records began in April 2005.
Mortgage approvals for house purchase fell 2.5 per cent between February and March.