House prices fell by 0.2% for the second month in succession during January, but are expected to remain relatively stable in 2012.
The monthly fall means that at the end of January the average price of a home in the UK was £162,228.
Annually, house prices have increased by 0.6%, the figures from Nationwide show.
The lack of new homes coming onto the market is helping to support house prices, with only a sideways or modest fall in values predicted to take place in the coming months.
Robert Gardner, chief economist at Nationwide said that the demand/supply balance could move in favour of buyers in the coming months, although the economy is not expected to noticeably improve until the second half of the year at the earliest.
Potential buyers are also being stopped in their tracks by their inability to raise a sufficiently-sized deposit.
Despite house prices struggling, they are still historically high compared to people's incomes, while lenders have adopted stricter lending criteria since the credit crunch.
"Over the course of 2008 the median first time buyer deposit rose from 10% to 25% as lenders became more cautious, offering fewer products that required a small deposit," said Mr Gardner.
"However, since early 2010 there has been a modest reversal, with the median deposit falling back to 20% as conditions in the economy and financial system have stabilised."
For current homeowners, the long-term decline in interest rates has provided some welcome relief, figures show.
Since 2007, initial mortgage payments as a percentage of take home pay have fallen from 46% to 31% for a first time buyer borrowing with a 20% deposit.
Compared to take home pay, initial mortgage payments are now at their lowest level since 2003, just above the long run average of 29%.
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