The average house price hit £288,000 in February, £5,000 lower than the peak in November 2022, said the Office for National Statistics.

However was still £16,000 higher than a year earlier.

The ONS said that house prices fell by 0.3% between January and February – the third monthly drop on the bounce.

On an annual basis house prices rose 5.5% in the year to February. This was down from 6.5% in January and the lowest annual rise since October 2020.

Nations and regions

Average house prices increased over the 12 months to £308,000 (6.0%) in England, £215,000 in Wales (6.4%), £180,000 in Scotland (1.0%) and £175,000 in Northern Ireland (10.2%).

The West Midlands saw the highest annual percentage change of all English regions in the 12 months to February 2023 (8.6%), while London saw the lowest (2.9%).

However, the capital still has the most expensive property prices of any region in the UK, with an average price of £532,000 in February 2023.

The North East has the lowest average house price of all English regions, at £160,000 in February 2023.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “There’s plenty of misery in the figures. Falls continued in February and actually picked up pace. This owes much to the fact that, as the RICS figures show, buyer demand had been falling for an impressive ten consecutive months.

“The Zoopla figures show that this dearth of buyers meant a huge numbers of sellers were being forced to cut prices in order to shift their home. We know that despite their best efforts, the number of properties sold in February was down by almost a fifth in a year and 4% in a month.”

Andy Sommerville, director at Search Acumen, added: “We are continuing to see house prices fall as the cost of living and a new era of more expensive borrowing puts downward pressure on valuations. Figures today show inflation is falling, but unfortunately at a slower rate than had been expected, and the knock-on implication could be further rate rises when the Bank of England Monetary Policy Committee next meets.

“But, if we pencil in another interest rate rise, this will likely mean we continue to see house prices stagnate for a little longer over the months ahead before a stabilisation and recovery later in the year and into 2024 as inflation comes down more significantly.”