A "volatile" housing market could be a boost to those investing inbuy-to-let properties.
According to new data from the Department for Communities and Local Government, prices over the first three months of the year were 0.5 per cent down on the previous quarter.
However, figures for March show prices soared by 1.2 per cent during the month, leaving them 0.9 per cent higher than a year ago.
This may be welcomed by owners of buy-to-let properties as it may lead to a greater number of people renting rather than buying a home.
But Howard Archer of analyst IHS Global Insight warned that future property market fluctuations were hard to predict.
"House prices are notoriously volatile from month to month and from survey to survey," he commented.
The government figures also suggest that the housing market has become fragmented across the UK.
Price rises in London have far outstripped those of other areas, growing by 5.6 per cent year-on-year during March.
Meanwhile prices in the East of England rose 2.9 per cent while the South East saw a 2.5 per cent increase.
All other regions of the UK, apart from the East Midlands, posted an annual decline in house prices, with the steepest fall coming in Northern Ireland which saw a 13.9 per cent decline.
Recent research by mortgage broker TBMC revealed London is also the most popular place for investment in buy-to-let property, with the capital accounting for more than 17 per cent of mortgage offers made to buyers during the first quarter of the year.