House prices fell back during March according to the latest figures from the Nationwide.
The market has experienced relatively flat price growth since August last year, according to the figures, but this is the largest monthly fall in prices since June 1995.
The annual rate of inflation also fell during March to 7.9%, down from 10.2% in February. This is the first time the annual growth rate has fallen below 10% since June 2001.
Nationwide maintains that this latest fall is consistent with their view that the market is undergoing a soft landing, and that house price movements during 2005 would be characterised by rises in some months and falls in others.
The mortgage lender continues to predict that the growth of house prices will decelerate throughout the year as the market adjusts to lower levels of demand.
Alex Bannister, Nationwide?s Group Economist, said: ?The uncertainty over interest rates may cause house buyers to be a little more cautious in the coming months, but the economic fundamentals still look fairly good. Recent steady growth in earnings and rising employment and equity prices has helped to underpin consumers? confidence.?
According to Nationwide?s regional figures, there is still a clear north-south divide in the property market, with prices growing most quickly in the North of England and in Wales Scotland and Northern Ireland. The fastest annual rate of growth is currently being experienced in Yorkshire and Humberside at 15.5%, while London recorded the slowest increase in prices at 3.8%.
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