Property prices for homes in England and Wales fell an unadjusted 1.6 per cent in the period from early July to early August, a survey showed today.
Property website Rightmove said that fall brought the annual rate of house price inflation back into single digits at 9 per cent from 10.6 per cent in the month before.
The news provided support for government bonds in thin summer trading conditions as it suggested that Britain's housing market revival may have started running out of steam even before the Bank of England raised interest rates this month.
Government figures also out today showed the number of completed property transactions fell to a seasonally adjusted 139,000, the lowest level since the start of the year.
But the Revenue and Customs data are widely viewed as a lagging indicator, and recent industry data have pointed to a sharp increase in mortgage lending.
More reliable indicators than the Rightmove survey such as the Halifax index showed house prices rose 0.2 per cent in July. The Nationwide building society's gauge revealed a rise of 0.8 per cent.
Economists said the Rightmove survey's more downbeat reading seemed more like a correction to the 2.9 per cent gain reported for the month before which could have been the result of seasonal distortions.