London and the East experienced the only monthly price rises with a movement of 0.2%. Yorkshire & the Humber saw monthly prices drop by 2.6%.
However former RICS chairman Jeremy Leaf said that "the month-on-month fall in the average house price is not a surprise as the market is gearing up for a change".
He added:
"However, bearing in mind the historic nature of these figures, we would have expected higher transaction levels as the stamp duty deadline approaches. But with the number of completed house sales in England and Wales falling by 5% in January compared with the same month last year, there does not seem to have been the stampede that many expected. It may be that investors and second homebuyers left it really late in the day and it is February and March’s figures that will show a significant uplift in transactions."
The annual price change now stands at 6.7%, bringing the average house price in England and Wales to £189,901.
London remains the region with the most significant annual price increase at 13.9%. The North East saw the only annual price fall with a 0.7% drop.
John Eastgate, Sales and Marketing Director of OneSavings Bank, commented:
“This monthly dip in house prices contrasts with what has been a red-hot property market in March, a month when mortgage lending shot up 47% as buyers rushed to move before the stamp duty deadline for second properties. In reality, once the dust settles on the March madness and activity returns to more normal levels, house prices are likely to return to their pattern of sustained increase."
Rishi Passi, CEO of Oblix Capital, added:
“The stamp duty stampede of buy-to-let investors rushing to complete house purchases and sales ahead of April’s tax changes ramped up demand for properties across the country in March, but this heightened activity wasn’t enough to lift overall UK house prices, which fell by a modest 0.5% between February and March. This is good news for first time buyers, as will be the forecast that prices may well moderate further in the coming months as we witness the full effect of the new tax burdens on buy to let landlords."
