On a monthly basis, house prices rose modestly by 0.2%, after taking account of seasonal factors.
Average house price slightly increased to £213,102 in March, compared to £211,304 in February.
However, the report found that annual prices fell in London and the South East.
Regional overview
Northern Ireland remained the strongest performing home nation in Q1, although annual price growth softened to 3.3% standing at £142,484, from 5.8% last quarter.
Scotland saw a slight pick-up in annual price growth to 2.4% standing at £147,728, while Wales saw a marked slowing in growth to 0.9% from 4.0% last quarter, standing at £153,287.
Meanwhile, England recorded its first annual price fall since 2012, with prices down 0.7% compared with Q1 2018, driven by declines in the South East of England.
London was the weakest performing region in Q1, with prices 3.8% lower than the same period of 2018, at £455,594. This is the fastest pace of decline since 2009 and the seventh consecutive quarter in which prices have declined in the capital.
Indicators remained flat in recent months
Robert Gardner, Nationwide’s chief economist, said that 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.
He added: “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.
“While the number of properties coming onto the market has also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months.”
Measures needed
Craig McKinlay, new business director of Kensington Mortgages, said that while a slowdown in prices and low interest rates were tempting some first-time buyers into the market, low levels of supply remained a problem for those further up the chain.
He added: “What is needed are measures from the government to address this long-running problem. Incentives for older homeowners to downsize such as an exemption from stamp duty, for example, would be a great first step.
“Policies are needed to free up existing supply as well as promote the building of all types of tenure.”
Jeff Knight, marketing director for Foundation Home Loans, said: “As Brexit-linked uncertainty ramps up, it’s hard to look past the impact on market activity. That said, with remortgaging activity reaching its highest peak in nine years last month, it’s clear not everything has come to a complete stand still.
“There are even opportunities for first-time buyers thanks to recent housing initiatives and the bargain priced offers from those selling up.
“Whether buyers decide to stick to their wait and see approach or shrug off economic concerns altogether, it’s crucial both the supply of new property offerings is as consistent as rental accommodation for those who aren’t yet ready to commit to ownership.”
