Lending figures from the Bank of England also showed mortgage approvals plunged in February, suggesting the market has slowed further.
Prices fell one per cent in March, the first decline in six months, leaving prices 0.9 per cent below their level in March 2011 at an average of £163,327.
Over the first quarter as a whole prices fell 0.1 per cent, though that varied by region – prices fell 0.7 per cent in London, while the north experienced the strongest growth at 0.6 per cent, and Wales saw the largest fall at 3.1 per cent.
“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’s Robert Gardner.
“The challenging economic backdrop is likely to continue, with prices moving sideways or modestly lower over the next twelve months.”
Mortgage approvals plummeted to an eight-month low of 49,000 in February, down from 58,000 in January, the Bank revealed.