UK house prices fell by over £3,000 in March as the market corrected itself, following February’s surge in growth, according to the latest Halifax house price index.
House prices in the three months to March were 2.6% higher than in the same three months a year earlier.
Monthly house prices fell by 1.6% in March following a rise of 5.9% the previous month.
The average house price is now £233,181, down from £236,800 in February.
The lack of activity in the housing market along with record low stock levels continue to support prices.
Lucy Pendleton, founder director of independent estate agents James Pendleton, says: “The UK housing market is proving as unpredictable at the moment as the daily Brexit negotiation updates.
“Last month’s figures totally blindsided all commentators, and even stoked a little controversy with concerns aired over the credibility of the index.
"It's no surprise to see prices fall back this month as low stock levels and general buyer malaise plagues the market."
Monthly UK home sales remain steady while February mortgage approvals fell compared to January.
There were 101,780 home sales in February, close to the five-year average of 101,135 and up 2.8% above the previous 12-month average.
Figures from the Bank of England show that the number of mortgages approved to finance house purchases – a leading indicator of completed house sales - fell 3.5% to 64,337.
Russell Galley, managing director at Halifax, says: “The need to build up a deposit before getting a mortgage is still a challenge for many looking to buy a property. However, the combined effect of fewer houses for sale and fewer people looking to buy continues to support prices in the long-term.
“These conflicting challenges, when combined with the ongoing uncertainty around Brexit, have had an impact across the country but most notably in London, meaning that we continue to expect subdued price growth for the time being.”
The Halifax house price index tends to be more volatile than other measures.
Figures from Nationwide show that England recorded its first annual house price fall since 2012, driven by declines in London and the South East. All regions outside of the capital showed growth.
Annual house price growth rose by 0.7% in March - up from 0.4% the previous month - according to the lender.