This January saw house prices fall for the first time in six months.
The house price index from Nationwide reported a 0.3% fall in the average UK property price to £229,748.
It is the first time that house prices have declined since June, which may be as a result of the upcoming end to the stamp duty holiday.
The housing market has boomed over the past year and UK mortgage approvals hit the highest level since 2007. New data from the Bank of England showed a surge in mortgage applications in the second half of the year as the stamp duty holiday was introduced.
Commenting on the housing market, Nationwide’s chief economist Robert Gardner said: “To a large extent, the slowdown probably reflects a tapering of demand ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase.
“While the stamp duty holiday is not due to expire until the end of March, activity would be expected to weaken well before that, given that the purchase process typically takes several months (note that our house price index is based on data at the mortgage approval stage).”
“Looking ahead, shifts in housing preferences are likely to continue to provide some support for the market,” he added, “However, if the stamp duty holiday ends as scheduled, and labour market conditions continue to weaken as most analysts expect, housing market activity is likely to slow, perhaps sharply, in the coming months.”
The stamp duty holiday is set to end at the end of March.