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UK property prices decline by 0.2% in January

It means that the Price of a typical home is now £162,228 and prices are not expected to change much in the coming months.

‘Given the challenging conditions prevailing in late 2011, with the UK economy contracting in the final three months of the year, it's not surprising that house price growth softened at the start of 2012,’ said Robert Gardner, Nationwide's chief economist.

‘The demand/supply balance may move further in favour of buyers in the months ahead. The economy is not expected to gather much momentum until the second half of 2012 at the earliest, which suggests that labour market conditions and buyer sentiment may be slow to improve,’ he explained.

‘Nevertheless, with the flow of properties coming onto the market still more of a trickle than a flood, house prices are likely to continue to move sideways or only modestly lower in the months ahead,’ he added.

Finding a deposit is still a major hurdle for many would be buyers and the poor economic outlook and jobs market in the UK is affecting the real estate market.

‘The decline in long-term interest rates has helped to provide some relief for borrowers. Indeed, interest rates for new lending are currently at a record low, which has helped to improve initial mortgage affordability,’ said Gardner.