The trend over the last year shows a stabilising since the autumn with prices rising around 5-6%, with the average house being sold for £219,949, according to Halifax.
On a quarterly basis, prices in the three months to February were 1.7% higher than in the preceding three months – the lowest since November.
Halifax housing economist Martin Ellis said competing demand and supply pressures were likely to see prices further stagnate during the year.
“Housing demand is being supported by an economy that continues to perform well with employment still expanding. Meanwhile, the supply of both new homes and existing properties available for sale remains low. This combination is pushing up prices,” he said.
“The annual rate of house price growth has, however, nearly halved over the past 11 months. A sustained period of house price growth in excess of pay rises has made it increasingly difficult for many to purchase a home.
“This development, together with signs of reduced momentum in the jobs market and squeezed consumer spending power, is expected to curb house price growth during 2017,” Ellis added.
Former Royal Institute of Chartered Surveyors residential chairman and current north London estate agent Jeremy Leaf said the figures reflected the largely stable market.
“These figures are interesting as they slightly conflict with the Nationwide survey from a few days ago, although both show a housing market which is broadly stable with prices continuing to be supported by a lack of supply and low interest rates,” he said.
“This reflects what we are finding on the ground.
“Looking forward, activity does seem to have picked up a little since the slow start to the year and we hope the chancellor doesn’t do anything to stop the market in its tracks tomorrow and in particular supports first-time buyer activity,” he added.
Founder and CEO of eMoov Russell Quirk echoed the importance of the chancellor potentially addressing house building.
“It is probable that we will continue to see the property market blossom as we enter into spring, in what is traditionally the busiest time of the year,” he said.
“However, the continued growth of these numbers could hinge on tomorrow’s budget announcement and whether or not the government decides to actually tackle the shortage of housing in the UK.
“If they do finally take a step in the right direction price growth could cool to a certain extent, as buyer thirst is quenched with an adequate level of housing stock, although this would be a slow process,” he added.