The average UK house price fell by 0.2% month on month in March, although there are signs that activity is picking up, according to a report.
UK property values increased by 1.6% annually, taking the average UK house price to £261,142, Nationwide Building Society said.
"Activity has picked up from the weak levels prevailing towards the end of 2023 but remains relatively subdued by historic standards,". Robert Gardner, Nationwide's chief economist, said.
"For example, the number of mortgages approved for house purchase in January was around 15% below pre-pandemic levels. This largely reflects the impact of higher interest rates on affordability. While mortgage rates are below the peaks seen in mid-2023, they remain well above the lows prevailing in the wake of the pandemic," he added.
Mr Gardner pointed to signs that consumer sentiment is improving.
"Indeed, surveyors report a pick-up in new buyer inquiries and new instructions to sell in recent months. Moreover, with income growth continuing to outpace house price growth by a healthy margin, housing affordability is improving, albeit gradually," he said.
"If these trends are maintained, activity is likely to gain momentum, though the pace of the recovery is still likely to be heavily influenced by the trajectory of interest rates," he added.
The index also included data for the UK's nations and regions, showing annual changes during the three months to March.
The figures showed that within England there was a split, with house prices generally increasing in northern regions and falling in the South.
London remained the best-performing southern region, with annual price growth recovering to 1.6%. The South West was the weakest performing region, with prices down 1.7% year on year.
Mr Gardner said Northern Ireland remained the best-performing area, with prices up by 4.6% compared with the first quarter of 2023.
Rob Wood, chief UK economist at Pantheon Macroeconomics, described the month-on-month fall in house prices as a "blip".
"Forward-looking indicators continue to suggest house prices will keep rising as mortgage rates gradually tick down. "We continue to expect house prices to rise 4% year over year in 2024," he stated.
