London was the weakest performing region in the UK over the first quarter of 2019, according to Nationwide, with prices 3.8% lower than the same period of 2018.

This represents the fastest pace of decline since 2009 and the seventh consecutive quarter in which prices have declined in the capital.

Robert Gardner, Nationwide’s chief economist, said: “This trend is not entirely unexpected, however, as it follows several years of sustained outperformance which left affordability more stretched.

“Policy changes that have impacted the buy-to-let market in recent years are also likely to have exerted more of a drag in London, given that the private rental sector accounts for a larger proportion of the housing stock in the capital than elsewhere in the country.”

Andrew Montlake, director of Coreco, added: “Prices in the capital may have declined at their fastest rate for a decade but after the outrageous gains of recent years and given the current chaos in Westminster it is an understandable drop.

“London is particularly sensitive to ongoing political uncertainty but it is also paying for the astronomic house price growth of five or six years ago.”

Overall UK prices rising

Acorss the rest of the UK prices are still rising, but the pace of growth is subdued, said the building society.

Annual house price growth was just 0.7% in March, with a modest 0.2% price rise during the month taking the average UK property price to £213,102.

Nationwide’s Gardner said: “Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, even though survey data suggests that sentiment has softened.

“Measures of consumer confidence weakened around the turn of the year and surveyors report that new buyer enquiries have continued to decline, falling to their lowest level since 2008 in February.”

National stats

England recorded its first annual price fall since 2012, with prices down 0.7% compared with quarter one of 2018, driven by declines in the South East of England.

Northern Ireland remained the strongest performing home nation in quarter one, although annual price growth softened to 3.3%, from 5.8% last quarter.

Scotland saw a slight pick up in annual price growth to 2.4%, while Wales saw a marked slowing in growth to 0.9% (from 4.0% last quarter).