They will get a chance to level the two-match series at Christchurch in the second Test, which starts on Thursday.
A heavy defeat looked on the cards from day one of this match when England were dismissed for 58, their sixth-lowest total in Test history.
However, with two days impacted by rain, they had a chance to salvage a draw if they could bat out the final day.
Ben Stokes and Chris Woakes gave England a chance of the draw, putting on a partnership of 83, before the former lost his wicket somewhat cheaply.
England captain Joe Root said he was satisfied with his sides’ determination and improvement in the second innings but stressed England must be better on the road.
He said; "As a group, as a collective squad, we're always looking for ways of getting better, perform more consistently on different surfaces around the world. At home, in our own conditions, we're a handful and very difficult to play against.”
"No one gave themselves the opportunity to get in and build a partnership in that first innings and that is so vital in Test cricket. No excuses. We just weren't good enough."
This is England's fifth defeat from six Tests this winter and tenth defeat from 12 away from home.
England produced a number of imperious displays to register a stunning 4-1 series victory over Australia in the recent One-Day Internationals.
It is widely believed that England have never been stronger in white-ball cricket, with the likes of Jos Buttler, Alex Hales and Jason Roy capable of dominating any bowler in world cricket on their day.
Attention now turns to the upcoming T20 tri-series, where England will once again face Australia as well as New Zealand.
Surrey all-rounder Sam Curran has been added to the England squad, which will be co-hosted by their two opponents, and the 19-year-old joins his brother Tom.
Test captain Joe Root is set to miss the series and will return home for a break before returning for the five-match one-day series against New Zealand, which starts in Hamilton on 25th February.
Root suffered from severe dehydration because of a viral gastroenteritis bug during the final Ashes Test at the start of the year, and the decision has been taken to allow him some rest before another busy period of cricket.
There is also the possibility that all-rounder Ben Stokes could join up with the squad during the series, and his inclusion would certainly boost an already talented group of players.
Each team will play each other twice at venues across Australia and New Zealand, before the final which will take place at Auckland on 21st February.
England squad for T20 tri-series: Eoin Morgan (capt), Sam Billings (wk), Jos Buttler (wk), Sam Curran, Tom Curran, Liam Dawson, Alex Hales, Chris Jordan, Dawid Malan, Liam Plunkett, Adil Rashid, Jason Roy, Ben Stokes, James Vince, David Willey, Mark Wood.
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