Average house price dipped 0.3% in February to £210,402

House prices dipped for the first time in six months in February, according to an index.

A 0.3% month-on-month fall took the average UK house price to £210,402, Nationwide Building Society said.

It was the first time since August 2017 that house prices have fallen month on month.

The annual pace of house price growth eased back in February, after an unexpected pick-up in January, Nationwide said.

House prices were 2.2% higher than a year earlier.

Robert Gardner, Nationwide's chief economist, said: "After picking up unexpectedly in January, UK house price growth fell back in February, to 2.2% from 3.2% the previous month.

"House prices fell by 0.3% over the month, after taking account of seasonal factors.

"Month-to-month changes can be volatile, but the slowdown is consistent with signs of softening in the household sector in recent months.

"Retail sales were relatively soft over the Christmas period and at the start of the new year, as were key measures of consumer confidence, as the squeeze on household incomes continued to take its toll."

Mr Gardner also pointed to figures showing low numbers of mortgage approvals in December.

He said: "Activity around the year-end can often be volatile, but the weak reading comes off the back of subdued activity in October and November."

Mr Gardner said Brexit and the wider economy will be key to the housing market's performance in the year ahead.

He said the UK economy is expected to grow at a modest pace, with the squeeze on household budgets exerting a modest drag on housing market activity and house price growth.

But low mortgage interest rates and a lack of properties on the market should help hold house prices up, he said.

Mr Gardner continued: "Overall, we expect house prices to be broadly flat, with a marginal gain of around 1% over the course of 2018."

Howard Archer, chief economic adviser at EY Item Club, said the 0.3% dip in house prices marked "a clear correction after prices had risen 0.8% in January and 0.5% in December".

He said: "The latest Nationwide data fuels our belief that 2018 will be a difficult year for the housing market."

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