House prices in March grew by 0.4 per cent, a slower rate than in previous months, according to the Nationwide building society.
House prices are now 9.5 per cent higher than they were at the same point last year.
London house prices are up 18 per cent compared to March 2013. However, Nationwide said "there are some tentative signs of moderation."
Low interest rates combined with an improving economic outlook and availability of credit are continuing to drive prices ever higher.
London estate agency VanHan, commented:
There are signs that growth is moderating with a slower pace in March than the previous two months. This cooling will only be moderate, all things considered, given the continued strong demand from buyers combined with a structural lack of supply.
The number of transactions remains well below what they were in 2007. The average price of a London house climbed to £362,000, while the average house price for the country reached £180,000.