House prices fell 0.5% on a monthly basis and the quarterly change was a drop of 1.1%.
Martin Ellis, housing economist at Halifax, said: “Overall prices nationally are at broadly the same level as last spring.
“This stability in prices is explained by the fact that market conditions have changed very little over this period with demand supported by low interest rates and supply remaining tight.
“Falling inflation should relieve some of the pressure on household finances over the coming months.”
Ellis added that many of the economic statistics released in recent weeks had also been encouraging suggesting that the UK may avoid slipping back into recession.
He said: “These developments are positive for the housing market outlook. Significant uncertainties however persist and the prospects for house prices during 2012 will to a large extent depend on events in the eurozone and the potential knock-on effects on the UK.”
Ben Thompson, managing director of Legal & General mortgage club, said:
"This data reflects the rather downbeat end of 2011 which was dominated by bad news after bad news, in particular the eurozone woes.
“Recent weeks have seen slight improvements in a number of areas including housing activity. This should translate into slightly better news in terms of house prices in the coming months.
“Should the good news continue, this will help consumer confidence and increase demand for housing, resulting in a hardening of prices.
“The combination of almost record low mortgage rates and reduced house prices ought to represent a great buying opportunity now, for those that are willing and able to afford to buy - cheap mortgage rates will not be around forever."
