August is traditionally a weak month for British house prices, with many buyers on holiday, and Hometrack's data are not seasonally adjusted.
Nonetheless the firm said a downward price trend was now underway after July's 0.1% fall.
"The housing market is in the process of a modest re-pricing that is likely to run for the next 6 to 12 months," said Hometrack's director of research Richard Donnell
"This follows a period of 18 months over which house prices have firmed rapidly on the back of a potent mix of rising demand and a chronic lack of housing for sale," Donnell added.
Hometrack said house prices are 1.5% higher than a year ago, the smallest annual gain since March.
Official Land Registry price data, which lags industry surveys, showed on Friday that house prices were 6.7% higher in July than a year ago after a 0.4% monthly rise.
Hometrack's survey is based on estate agents' and surveyors' estimate of realistic prices, and has typically shown smaller rises and falls than official data and figures from major British mortgage lenders Halifax and Nationwide. — Reuters
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