The latest Land Registry house price index shows a monthly price decrease of 0.8%.
The data shows an annual price increase of 5.3%, taking the average property value in England and Wales to £178,007 compared with the peak of £181,049 in November 2007.
Regionally, London experienced the greatest increase in its average property value over the last 12 months with a movement of 11.3%, while the North East saw the only annual price fall with a decrease of 2.9%.
The North East also saw the largest monthly price decrease with a fall of 4%
The number of completed house sales in England & Wales decreased by 18% to 53,168 compared with 65,175 in January 2014. The number of properties sold in England and Wales for over £1 million also decreased by 19% to 851 from 1,049 a year earlier.
Jeremy Duncombe, Director, Legal & General Mortgage Club, said:
“Activity in the housing market over the first quarter of the year has failed to reach the levels predicted at the start of the year. This has contributed to the fall in the rate of house price growth reported in the Land Registry figures today. However, despite this slow start, activity in the market is likely to pick up over the coming months as uncertainty around the election result is resolved. In addition, continuing low interest rates mean that now is a good time for those coming to the end of a mortgage deal to look for a new rate."
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented:
"While the latest Nationwide and Halifax house price indices indicated positive momentum in the housing market, the Land Registry records a decline in prices in March, suggesting the picture is rather more complex.
"The Land Registry points to a decrease in the number of property transactions over the past year and there is a shortage of homes coming onto the market.
"The national average masks significant regional variations. House prices in London rose by 0.2% in March, with double-digit annual growth of 11.3% - more than twice the national average of 5.3%. While the luxury end of the London market may have come to a halt because of uncertainty surrounding the General Election, it is business as usual for the mainstream market. This has been fuelled by cheap mortgage rates, which look set to continue with lenders demonstrating a real appetite to lend. This will further support mainstream house prices as buyers take advantage of rates that are at their lowest in a generation."
Guy Meacock, head of the London office for buying agency Prime Purchase, added:
"Despite last month’s decline in prices, housing activity is likely to pick up during the course of this year.
"There is panic in the housing market as a result of the culmination of many different tax changes coming together. A possible mansion tax and fear of the unknown is playing a big part, although the recent stamp duty changes arguably have had a much bigger impact on the top end of the market. A Labour/SNP coalition will soften the market but in terms of buying now it is still a good time as there is less competition and more room for negotiation."