Figures from the Nationwide show that the price of the average house has fallen in March by 0.6% to £179,100.
The annual rate of house price inflation is now 1.1%, the lowest since March 1996.
Fionnuala Earley, group economist for Nationwide, is quoted in The Times:
"The outlook for UK house prices is clearly more downbeat. Some of the downside risks we identified in November have become a reality — most notably the continued turmoil in the financial markets."
Howard Archer, chief economist for Global Insight, is predicting a 5% fall in house prices this year and next.
The downturn and continued uncertainty wrt the economy adds to the pressure on the Bank of England to cut interest rates.