Growth fell from a near two-year high of 4.1 per cent measured at the start of the year, according to data from lender Halifax.
Between January and February prices nudged up by 0.3 per cent, and on a quarterly basis by 2.9 per cent.
The average value now stands at £240,677.
Critics said the market had started the year on the front foot thanks to a boost from December’s election outcome and increased political certainty.
However, it is now feared the coronavirus and its wider impact on the economy could hit house prices and confidence in the market.
Russell Galley, managing director at Halifax, said: “Much like we saw in January, the increases seen in February reflect the continued improvement of key market indicators.
“The sustained level of buyer and seller activity is strong compared to recent years, with positive employment conditions and a competitive mortgage market continuing to support demand.
“Looking ahead, there are a number of risks, including the potential impact of coronavirus, which continue to exert pressure on the economy and we wait to see how these will affect housing market sentiment later in the year.”
Founder and chief executive of Stone Real Estate, Michael Stone, added: “We’ve seen the dark clouds of Brexit inspired uncertainty hang over the market for some time causing a drop in price growth and transactions.
“However, just as they finally start to make way for blue skies and buoyant price growth, there could be another storm front rolling in in the form of the threat from the coronavirus.
“Currently, top-line price growth is yet to see any impact but in the new build sector, business activities on foreign soils have all but ceased and many housebuilders have been unable to showcase their latest development launches to foreign investors.”
