British house prices sank by 1% in March from the level in February, marking the biggest monthly drop for more than two years, according to a key survey by Nationwide.
The average value of a home in Britain stood at £163,327 sterling in March, according to Nationwide. That was a drop of 0.9% compared with the same month last year.
The market took a hit from the end of a two-year exemption on paying tax on property purchases for houses and flats costing less than £250,000.
The "stamp duty holiday" expired last week.
"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 chief economist Robert Gardner.
"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,'' he said.
"However, in our view the challenging economic backdrop is likely to continue to act as a drag, with house prices moving sideways or modestly lower over the next twelve months," he added.
The month-on-month price drop in March, meanwhile, was the biggest decline since February 2010, when the market had dived by 1.2%.
