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The fragility of confidence in Britain's housing market was starkly revealed when Nationwide BS reported that February had ended the run of nine consecutive months of house price rises.
Britain's biggest lender says that icy weather - coupled with the ending of the Stamp Duty holiday at the end of 2009 - might have caused the fall in demand, which fed into a 1 per cent drop in agreed prices recorded in February.
It says the average house price at the end of the month was £161,320, against £163,481 at the end of January.
Nationwide chief economist Martin Gahbauer said: "At this stage, it is difficult to gauge how much of the drop in housing activity is attributable to one-off factors, and therefore, whether February's fall in prices is just a temporary blip, or the start of a new trend.
"Judging from the fall in retail sales during January, however, the housing market does not appear to be the only sector of the economy to have experienced a setback related to adverse weather, and the expiry of economic stimulus measures."
Nationwide also points out that house prices were starting to move out of line with the general economic recovery, which is being restrained by low wage rises and rising unemployment - and a pause in rising prices will help first time buyers struggling to get on the ladder.
However, over the past year, the lender claims house prices show an average rise of 9.2 per cent, which is actually only a slight increase on the 8.6 per cent rise recorded in January.
Reaction to the Nationwide figures has been varied. Stuart Law, chief executive of Assetz, the property investment company, says: "It is likely that the underlying supply and demand imbalance, coupled with improving mortgage availability, will result in prices being driven upwards in the next few months. We still fully expect to end 2010 with a modest 5 per cent growth in overall house prices."
The Assetz House Price Watch - based on data from the five leading house price indexes, including Nationwide and Halifax - puts annual house price growth at 4.7 per cent. It suggests the average UK house price is £194,168, significantly ahead of Nationwide.
If true, this bounce might be reflected in better March figures from Nationwide.
Richard Donnell, director of research at Hometrack, the housing market data specialists, fears all the talk of rising house prices is making sellers too bullish on what they can expect to get when they sell.
"There are signs that higher priced supply is coming to the market, but whether this stock sells remains to be seen as the growth in sales and demand over the first two months of 2010 is well down on previous years," said Richard.
