U.K. house prices dropped at the slowest pace since June 2010 in March, driven by the better economic prospects and buying ahead of the expiry of stamp duty exemption for the first-time buyers of any home worth less than 250,000, according to the latest RICS UK Housing Market Survey.

The survey revealed the seasonally adjusted house price balance rose to -10 in March compared to -13 in the previous month beating economists' forecasts of -12.

"It is possible that surveyors, as with financial markets, are now beginning to factor in less economic downside risk going forward," said the Royal Institution of Chartered Surveyors.

Across U.K. the forecast for future prices remained flat.

UK Housing Demand Slightly Improves in March
U.K. Housing Demand Rises on Stamp Duty Holiday Deadline in March

"Demand saw a slight boost in March as many first time buyers looked to beat the stamp duty holiday deadline. There has been a gentle increase in activity across the market in the early part of the year but it remains to be seen is whether this can continue, given the changes in the Budget and ongoing problems affecting the economy. London continues to outperform the rest of the UK in terms of prices but, interestingly, the North West did see an increase in activity in March," said Simon Rubinsohn, RICS Chief Economist while commenting on the survey.

"There has been a gentle increase in activity across the market in the early part of the year, but it remains to be seen whether this can continue, given the changes in the (government) budget and ongoing problems affecting the economy," he added.

London