The Index reported that house prices fell by a seasonably adjusted 0.5 per cent in February, partly offsetting the gains recorded in December and January. Overall prices have risen 0.8 per cent since July 2004.
The survey contrasted with other recent figures and industry sentiment, which suggests that the market still has some life in it.
Estate agents have reported signs of stabilisation in the market.
Halifax Estate Agents recorded the first upturn in sales agreed for six months in January, a development that was repeated in February.
The latest RICS survey similarly reported the first rise in newly agreed sales since April 2004 in January.
Additionally, the number of new buyer enquiries showed no significant change for a third successive month in January following a marked decline during much of the second half of 2004, according to RICS.
Martin Ellis, chief economist at the Halifax, said: “The figures continue the mixed pattern of monthly price rises and falls recorded since last summer and is consistent with a gradual slowdown in house price inflation.”
Andy Frankish, managing director of Mortgage Talk, said: “Commentators who forecasted a housing market crash during 2005 are being needlessly pessimistic. Our own figures showed a strong start to the new year, with further improvements in the trend for February.”
