UK house prices increased at a slower pace in March, data from Nationwide Building Society showed Thursday.
House prices grew 2.1 percent year-on-year in March, slower than the 2.2 percent increase seen in February. A similar slower growth was last seen in August. Economists had forecast a 2.6 percent rise.
On a monthly basis, house prices dropped unexpectedly by 0.2 percent following February's 0.4 percent decrease. This was the second consecutive fall in prices. Prices were forecast to rise 0.2 percent.
"Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rate," Robert Gardner, Nationwide's chief economist, said.
"Subdued economic activity and the ongoing squeeze on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year," Gardner added.
London was again the weakest performing region, with annual house prices falling 1 percent in the first quarter.
Average house prices in England increased by 0.9 percent in the first quarter and were up 1.9 percent year-on-year.