House prices were down by 0.6 per cent on a month-on-month basis in January, according to the Halifax House Price Index.
According to this measure annual house price growth fell to 2.2 per cent, meaning the average house price is now £223,285.
This was the second consecutive month that house prices fell, according to the measure, with prices falling by 0.8 per cent in December.
Figures also showed that in recent months there had been a decline in the number of instructions for sale, a sharp fall in the number of mortgage approvals and a slide in the number of home sales.
Russell Galley, managing director of Halifax Community Bank, said: "Although employment levels grew by 102,000 in the three months to November, household finances are still under pressure as consumer prices continue to grow faster than wages.
"Additionally, it’s still too early to see any impact for first-time buyers from the abolition of stamp duty on purchases of up to £300,000, which was announced in the November Budget.
"Despite the recent rise in the Bank of England Base Rate, mortgage rates are still very low. This, combined with an ongoing acute shortage of properties for sale, will continue to underpin house prices over the coming months."
The annual growth in house prices of 2.2 per cent is the lowest rate since July 2016.
According to recent Bank of England figures, the number of mortgage approvals for house purchase in December fell sharply to their weakest level since January 2015.
Remortgaging approvals also fell at the end of last year, following strong figures in the previous two months.
Meanwhile figures from the Royal Institution of Chartered Surveyors showed new instructions to sell continued to deteriorate at the headline level and have now fallen for 23 consecutive months - the worst sequence for almost eight years.
HM Revenue & Customs figures showed total UK home sales in 2017 were 0.6 per cent lower than in 2016 at 1.23m.
Despite this, Halifax's figures showed the number of first-time buyers was increasing, reaching 359,000 in 2017.
First-time buyers now account for half of all house purchases with a mortgage, an increase from 36 per cent a decade ago. This has come despite the average deposit nearly doubling from £17,740 in 2007 to £33,339 a decade later.
damian.fantato@ft.com
