A property index from estate agency chain Haart found the average price of a ‘starter home’ – usually purchased by first-time buyers – fell by 2.2% in February.

Across all property types, the average cost of a home in the UK fell 0.2% month-on-month to reach £204,355. However, this figure is 6.8% higher than a year ago.

London continued to skew this figure with the average property price in the capital standing at £466,990.

However, this figure is down 1% on January and is 4.6% lower than February 2014, showing the capital’s market has slowed significantly in the last 12 months.

Demand remained high, though, with 21 buyers chasing each property on the market in London. Across the country as a whole there are 12 would-be buyers for each home.

Paul Smith, chief executive officer of haart, said increased supply had caused prices to drop and the market was levelling off.

“So far this year average house prices are showing no significant fluctuations, which is good news for affordability. First-time buyers are now benefiting from a dip in the average price of a starter home by 2% annually and from broader economic factors such as low interest rates and Help to Buy incentives,” he said.

“Despite this promising start to 2015, the number of new home starts promised post general election by the main political parties falls well short of what is needed and we still lack a strategic long term policy to address supply.”