HOUSE prices fell by 0.6 per cent across the UK in March, the biggest monthly drop in almost ten years, the Nationwide reported.

Not since June 1995 have average values fallen so dramatically, the building society said.

Since the start of the year, prices have risen by just 7.9 per cent - the first time the annual growth rate has fallen below ten per cent since June 2001.

Despite this, the lender insisted the market was still experiencing a soft landing.

The price of a typical property is now £153,876, just over £11,000 more than in March 2004.

Evidence of the slowdown could, the Nationwide said, encourage the Bank of England to leave interest rates alone in the short term.

At a regional level there remains a North-South divide, with prices growing most quickly in the north of England and in Wales, Scotland and Northern Ireland.

Yorkshire and Humberside saw the fastest growth at 15.5 per cent, while London recorded the slowest, at 3.8 per cent.

The North-East saw year-on-year growth of 13.5 per cent.