The average house price of a home in Britain fell 0.5% in March - a drop of £1,575 - putting the average property price at £296,699.
Halifax reports that the annual rate of growth remains at 2.8%, unchanged from February, and predicts that potential further Bank Rate cuts, positive wage growth, and improving mortgage affordability should lead to a modest rise in prices this year.
Following a burst of activity as buyers rushed to beat the March stamp duty deadline, demand is returning to normal and new applications are slowing, reports head of mortgages Amanda Bryden.
She added: “Looking ahead, potential buyers still face challenges from the new normal of higher borrowing costs, a limited supply of available properties to choose from, and an uncertain economic outlook.”
Propertymark acknowledges that this house price reduction will be a huge disappointment to many sellers hoping to make gains on a house sale to climb up the housing ladder, but the trade body's Nathan Emerson hopes the dip is only temporary.
“The spring and summer months normally spur on a flurry in housing activity, especially at a time when there are many competitive mortgage deals out there right now as a result of the reduction in interest rates last year,” he added.
“However, with housing playing a vital role in the UK economy, international events could jeopardise the Bank of England’s target of a 2% inflation rate, which may thwart their ambitions to reduce interest rates further.
“The housing market must remain stable ahead of the Bank of England’s next decision on interest rates in May.”
Northern Ireland continues to record the strongest annual property price growth of any nation or region, rising 6.6% in March, followed by Scotland, up 4.3%, and Wales, up 3.7%.
London saw the slowest annual house price growth, from 1.5% in February to 1.1% in March.
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