London. UK house prices dropped in March after a stunning gain the previous month, mortgage lender Halifax said, extending an erratic run for its property index.

The 1.6 per cent drop followed a 6 per cent jump in February and a 3 per cent plunge in January. On a three-month basis, prices were up 3.2 per cent compared with a year earlier. Halifax expects values to rise around that pace this year.

Still, that rate of gains would be well below levels seen just a few years ago, as Brexit uncertainty takes its toll on the housing market. London is bearing the brunt of the turmoil, and a report from Nationwide last week showed prices in the capital are falling at the fastest pace since the financial crisis a decade ago.

The picture is brighter elsewhere in the UK, but activity remains lower and building up money for a deposit remains a challenge for buyers, Halifax said.

“These conflicting challenges, when combined with the ongoing uncertainty around Brexit, have had an impact across the country but most notably in London,” said Russell Galley, managing director at Halifax. “We continue to expect subdued price growth for the time being.”