House prices in Britain fell one percent in March, the steepest drop in two years, as the boost from a tax break for the first-time buyers came to an end, according to a survey from the Nationwide Building Society.
House prices were 0.9 percent lower than in March of last year, according to the Nationwide, driving the year on year rate of house price growth into negative territory for the first time in six months.
Economists expected a 0.2 percent monthly rise and a 0.9 percent yearly gain.
"A slowdown was to be expected, given the imminent expiry of the stamp duty holiday, which had provided a temporary boost to house prices in early 2012 as buyers brought forward purchases that would otherwise have taken place later in the year," " said Nationwide's Chief Economist Robert Gardner.
Despite various government schemes aimed at boosting the housing market, the lender said the challenging economic backdrop will likely to weigh on house prices over the next 12 months.
"This dampening effect on housing market activity and prices may fade over the course of the summer, especially if the wider economic outlook begins to improve and other policy measures, such as the Government's NewBuy scheme are successful in supporting buyer demand," said Gardner.