The decline follows a 0.4% month-on-month drop in January, which had been the first monthly fall in house prices on the Halifax measure since last May.

The year-on-year gain in house prices moderated to a six-month low of 5.2% in February, from 5.4% in January and 7.6% in November, the highest since June 2016.

Evidence of an underlying slowdown came from the three-month/three-month rise in house prices slowing to 0.5% in February (the weakest since last July) from 1.6% in January, 2.5% in December and 4.0% in October.

However, Nationwide reported a renewed firming of 0.7% m/m in house prices in February after a fall of 0.2% in January.

House prices have strengthened with housing market activity buoyed by the release of pent-up demand following the easing of restrictions from mid-May last year, people re-assessing their housing needs in the wake of lockdowns and the temporary raising of the Stamp Duty threshold.

Russell Galley, managing director, Halifax, said: The housing market has been at something of a crossroads at the start of this year, with upcoming events key to determining the path of activity and prices over the next few months. The government’s decision to extend the stamp duty holiday – one of the main drivers of demand from home movers during the pandemic – has removed a great deal of uncertainty for buyers with transactions yet to complete.

“The new mortgage guarantee scheme is another welcome development from this week’s Budget. Whilst mortgage approvals have reached record highs in recent months, hitting levels not seen since before the financial crisis of 2008, raising a deposit continues to be the single biggest hurdle for first-time buyers to overcome.”

He added: “In the longer-term, the performance of the housing market remains inextricably linked to the health of the wider economy. The pace and extent of recovery are still highly uncertain, and much will depend on the ongoing success of the UK’s vaccination roll out.

“Though there is the likelihood of an economic ‘bounceback’ from lockdown, with households not unduly impacted by the pandemic deploying the significant reserves of savings that they have built-up, higher unemployment is likely to limit new buyer demand. Therefore, we would not expect the level of growth seen in house prices over the past year to be sustained throughout 2021.”