House prices fell by 1% in February ending a run of nine months of house price rises, according to the latest index from Nationwide.
The three-month on three-month rate of change is at 1.6%, down from 2% in January.
The average house price in the UK now stands at £161,320, from £163,481 in January, though house prices are still 9.2% higher than at the same time last year.
Martin Gahbauer, chief economist at Nationwide, says: “New buyer enquiries dropped sharply in the New Year and there was also an associated drop in the number of new mortgages taken out by home buyers in January.
“This drop in demand seems to have fed into agreed prices during February.
“At this stage, it is difficult to gauge how much of the drop in housing activity is attributable to one-off factors and therefore whether February’s fall in prices is just a temporary blip or the start of a new trend.”
David Smith, senior partner at property consultancy Carter Jonas, says: “We shouldn’t be deflated by February’s figures.
“Although seasonal factors such as the end of the Stamp Duty holiday and the weather doubtless played a role in February’s dip, prices at the macro level were becoming disconnected from the broader economy.
“In the long term, a minor correction to the recent trend of price growth will bring greater stability to the market.”