Robert Gardner, Nationwide's chief economist, said: “February saw a further softening in annual house price growth to 5.7%, from 6.8% in January. This is the sixth month in a row in which annual growth has moderated, with house prices declining by 0.1% month on month.
“The broader economic backdrop has remained supportive of housing market activity. Mortgage rates remain close to all-time lows and consumer confidence remains buoyant thanks to a further steady improvement in labour market conditions.
“Indeed, the unemployment rate has continued to decline and earnings growth has picked up, particularly in inflation-adjusted terms, thanks in part to the sharp decline in energy prices.
“Nevertheless, the pace of housing market activity remains fairly subdued. There was a small increase in the number of mortgages approved for house purchase in December, up 2% from 59,000 in November to 60,300 in December, though it remains too early to determine whether this marks a turning point in activity.”
Stephen Smith, director, Legal & General Mortgage Club and Housing, said: “While house price growth in the UK has begun to slow in the past month, it is important to remain focused on the long term trends.
“Over the past couple of years, prices have risen rapidly and are close to exceeding their 2007 peak. While this may be viewed as a positive indicator of confidence in the market, it is important not to price people out.
“To avoid this, and allow the market to grow in a sustainable way over the long-term, we need to build more houses. Keeping a balance between the number of houses available and the number of buyers keeps prices lower and allows more people to get a foot on the housing ladder. If this balance is not maintained, prices rise too rapidly stopping homeowners from being able to move up the chain and first time buyers from being able to buy a property.”