Halifax, Britainís largest mortgage provider said that the cold weather at the start of the year, together with the end of the stamp duty holiday on properties prices between £125,000 and £175,000, also had an adverse impact on housing demand.
Martin Ellis, an economist for Halifax, said that an increase in the number of properties available for sale, as recent improvements in market conditions encouraged more homeowners to attempt to sell their property, had helped to reduce an imbalance between supply and demand.
The average house price in the UK is now £166,587. However, house prices in February were still 4.5 per cent higher on an annual basis. London however is currently bucking the trend with. The growth of house prices in the capital has been further fuelled by the first-time buyer market. According to the Index, the number of first-time buyers increased by 12.5% during February 2010 with hot spots in Wimbledon, Wembley Park and Southfields.Top of Form
Last week, Nationwide, the UKís biggest building society, said that prices had slumped 1 per cent in February, but that this could be a "positive development" that prevented the housing market from racing ahead of the general economy. There has been subdued yet widespread concern that the property market may experience a Ďdouble dipí and some might say this would be the first signs and others would say that this is a blip in the market. The only thing we can do is wait until next months statistics.
Howard Archer, of IHS Global Insight, said that the revival in house prices in recent months had been a consequence of sharply reduced mortgage interest rates and more affordable prices, as well as a shortage of properties for sale.
He said: "The fall in house prices in February reported both by the Halifax and the Nationwide is supportive to our long-held view that house prices will be prone to corrections in 2010 and will probably be no better than flat over the year.
"Although the Bank of England may well hold off from raising interest rates until 2011, the overall economic environment is still far from supportive for house prices while credit conditions remain pretty tight."
The Bank of England, as expected held interest rates at their historic low of 0.5 per cent.