The pace of this fall eased from the body’s revised 2.2% decline in the 12 months to December.     

The report adds that average house prices in England fell 1.5% to £299,000 in the year to January.  

Prices were down 0.8% to £213,000 in Wales, but rose 4.8% in Scotland to £190,000. Average home prices increased by 1.4% to £178,000 in the fourth quarter of last year from 12 months ago in Northern Ireland.  

Atom bank head of mortgages Richard Harrison says: “Ongoing economic pressures and affordability constraints at the start of the year meant that buyer confidence did not fully return to the housing market.  

“Looking ahead, while the jury is still out on whether we will see further house prices fall in the second quarter, the news last week that the UK economy returned to growth in January should in part help boost buyer confidence.   

“News this morning that inflation is falling faster than expected will also be well received, increasing expectations of base rate cuts and lower mortgage rates.  

“Affordability pressures remain, however, with Moneyfacts figures showing that mortgage rates in March started to creep up again and the average shelf-life of a mortgage product dropped to just 15 days.   

Propertymark chief executive Nathan Emerson says: “Although we have seen a slight dip demonstrated within the latest Office for National Statistics figures, we are now entering spring, which traditionally is one of the busiest times of the year for the housing market.    

“Propertymark’s own Housing Insight Report showed that there is an 80% increase in the number of new properties coming to the market.   

“With house prices continuing to normalise following the turbulence of the last three years, there should be no reason why people should hesitate to buy their ideal home.”  

SPF Private Clients chief executive Mark Harris points out: “With inflation falling to 3.4%, it’s time for the Bank of England to be bold and start cutting interest rates.   

“With inflation heading in the right direction, a rate cut will give the housing market a welcome boost.  

“Falling interest rates will have a knock-on effect on swap rates, which underpin the pricing of fixed-rate mortgages.

“Five-year swap rates fell this morning to 3.90% from 3.97% yesterday and if this trend continues, lenders will have more confidence and ability to reduce mortgage rates, which in turn will boost borrower affordability.”