Britain's house price declined by 1 percent in March compared to February due to the end of a two-year stamp duty holiday, building society Nationwide said Thursday.

According to Nationwide, the price of an average home went down 0.9 percent in March compared to a year earlier, reaching 163,327 pounds (259,197 U.S dollars).

This is the first price drop in six months and the biggest annual decline since June 2011. The slowdown in prices was expected, given the imminent expiry of stamp duty holiday.

In early 2012, buyers brought forward house purchases to beat the deadline, said Robert Gardner, chief economist of Nationwide.

"In our view, the challenging economic backdrop is likely to continue to act as a drag, with house prices moving sideways or modestly lower over the next 12 months," he added.

The British government said around 180,000 first-time buyers benefited from the tax holidays since it was introduced in March 2010.

It estimated about 65 percent of first-time buyers will pay stamp duty in the coming fiscal year, generating early 600 million pounds in revenues.

First-time buyers now also have to pay at least 1 percent property tax on properties worth more than 125,000 pounds.

In his budget, Chancellor of the Exchequer George Osborne announced a 7 percent stamp duty threshold on properties worth over 2 million pounds.

Nationwide's statistics show house prices in the first quarter this year grew 0.2 percent year-on-year with the average price standing at 162,722 pounds.

In the first quarter, London remained the region with the most expensive houses and strongest growth, while North Ireland was the least expensive region. (1 pound = 1.59 U.S. dollars)