Nationwide's monthly house price index (HPI) for October showed prices rose at a slower pace over the month at, 0.4 per cent.
However, annual house price inflation has turned positive for the first time since March 2008. The average price of a home, according to the building society, is now £162,038.
Martin Gahbauer, Nationwide's chief economist, said: 'House prices rose for a sixth consecutive month in October, but the strong upward momentum in property values seen over the summer is showing some signs of moderating as we head into the autumn months.'
In September prices rose by 0.9 per cent, and in July and August they rose 1.4 per cent each. This has led Nationwide to believe the rise may be steadying.
Mr Gahbauer added: 'A moderation in the rate of house price inflation was to be expected, as the very strong monthly increases seen over the summer months were unlikely to be sustainable over the long run.
'Slower house price inflation is also consistent with developments in housing market activity, as industry figures have shown that the pick-up in mortgage approvals for house purchases has lost some momentum in recent months.
'Although too early to tell for sure, it may also reflect a more natural level of stock available for sale coming to the market, alleviating some of the extreme shortages of property on the market seen during most of this year.'
Yesterday, the Bank of England said the number of approvals for home loans rose to an 18-month high in September.
Council of Mortgage Lenders economist Paul Samter said: 'There is clear evidence of a significant pick up in housing market lending activity from a year ago, even though it remains low on any historic comparison.'
However, annual house price inflation has turned positive for the first time since March 2008. The average price of a home, according to the building society, is now £162,038.
Martin Gahbauer, Nationwide's chief economist, said: 'House prices rose for a sixth consecutive month in October, but the strong upward momentum in property values seen over the summer is showing some signs of moderating as we head into the autumn months.'
In September prices rose by 0.9 per cent, and in July and August they rose 1.4 per cent each. This has led Nationwide to believe the rise may be steadying.
Mr Gahbauer added: 'A moderation in the rate of house price inflation was to be expected, as the very strong monthly increases seen over the summer months were unlikely to be sustainable over the long run.
'Slower house price inflation is also consistent with developments in housing market activity, as industry figures have shown that the pick-up in mortgage approvals for house purchases has lost some momentum in recent months.
'Although too early to tell for sure, it may also reflect a more natural level of stock available for sale coming to the market, alleviating some of the extreme shortages of property on the market seen during most of this year.'
Yesterday, the Bank of England said the number of approvals for home loans rose to an 18-month high in September.
Council of Mortgage Lenders economist Paul Samter said: 'There is clear evidence of a significant pick up in housing market lending activity from a year ago, even though it remains low on any historic comparison.'
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