UK housing market activity has “remained subdued”, the Nationwide says, as annual house price growth slowed for the seventh month in a row.
Annual price growth fell to 5.1% in March, down from 5.7% the month before.
House prices edged up 0.1% in March itself, the building society said, taking the average price to £189,454.
While price growth moderated across the UK, London and the south east of England continued to see the strongest growth.
However, Nationwide noted there was a “noticeable softening this quarter, particularly in London”.
Robert Gardner, Nationwide’s chief economist, said: “Economic conditions have remained supportive, with labour market conditions continuing to improve and mortgage interest rates close to all-time lows.
“Nevertheless, the pace of housing market activity has remained subdued, with the number of mortgages approved for house purchase in January around 20% below the level prevailing one year ago.”
Many potential first-time buyers consider prices to be beyond a level of affordability – an issue being considered by all the major parties ahead of the general election.
The Nationwide points out that housebuilding, seen by some as the key to greater affordability, has grown in areas when property prices have seen the most rapid growth. Prices are still rising, but the annual rate of increase is less than half the level seen during much of last summer.
UK house prices are 2% higher than their level before the financial crisis, according to the Nationwide.
However, this is a national average. In many regions, average property values remain well below their peak in 2007.
In Wales, prices were 0.5% lower in the first quarter of 2015 than they were in the first three months of 2014.
Figures from the Land Registry, also published on Friday, showed that there were still wide variations in the pace of house price changes.
Prices rose by 13.1% in London in the year to the end of February, taking the value of the average home to £463,872, the Land Registry said. However, in the north west of England prices rose by 0.7% over the same period, with the average home valued at £111,259.