UK house prices increased up by 0.1% in March, the Nationwide Building Society has reported.

However, the annual pace of growth slowed for the seventh month in a row to 5.1% from 5.7% in February. UK house prices are currently around 2% above their pre-crisis levels.

The mutual said the average house price in the UK was now £189,454.

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.

“While house price growth has moderated across the UK, there is still significant regional variation. Prices in London and the South of England continued to see the strongest rates of annual growth, though there was a noticeable softening this quarter, particularly in London.”

He said that price growth also continued to cool in the North West of England, Scotland and Wales, even though prices in these regions remain some way below their 2007 peak. In annual terms, prices in Wales declined by 0.5% in Q1.

Gardner said: “The sluggish recovery in housebuilding in recent years reinforces the view that UK housing supply is slow to respond to price signals. However, there is some evidence that more building is taking place in regions where affordability is more stretched.

“There is a relationship between the rate of increase in the housing stock in recent years and the level of house prices relative to local earnings. For example, regions that were more affordable, such as the North and North West, have seen the smallest increases in housing stock, with a rise of 1.1% over the 2011 to 2014 period, well below the average increase of 1.9% recorded in England and Wales as a whole.

“By contrast, areas such as the South East and South West, where house prices were relatively expensive, at more than six times average incomes, have seen the housing stock rise by 2.1% and 2.4% respectively over the same period.

“London remains something of an outlier, with housing stock increasing by 2.6% over the 2011 to 2014 period, above the national average. However, we would have expected a rise of around 3.1% in housing stock over this period given the experience in other regions.”