House prices rose 0.8% in August compared to 0.2% in July, figures from Nationwide said.
The average house cost of a home is now £273,751 - an increase of nearly £50,000 in two years, the lender said.
But annual growth slowed to 10% for August, down from 11% in July, Nationwide said.
This suggests the housing market is losing momentum as effects of the cost of living crisis start to kick in, experts said.
The looming rise in the energy price cap, soaring inflation hitting the price of everyday goods, plus rising interest rates increasing mortgage payments means many are deciding to stay where they are, or wait to see if house prices come down.
Those in the field said there had been fewer requests for surveyor reports and a drop in mortgage approvals.
But due to a lack of supply, price growth had "remained firm", Robert Gardner, Nationwide’s chief economist, the Financial Times reported.
He added: “We expect the market to slow further as pressure on household budgets intensifies in the coming quarters, with inflation set to remain in double digits into next year. “Moreover, the Bank of England is widely expected to continue raising interest rates, which will also exert a cooling impact on the market if this feeds through to mortgage rates, which have already increased noticeably in recent months.”
Nicky Stevenson, managing director at estate agency Fine & Country said: “Price gains continue to soften amid a squeeze on living standards and a decline in buyer affordability. Underlying demand remains robust though spiking energy bills and increased borrowing costs are having a gradual cooling effect which is expected to become more pronounced later in the year.
"While the pace of growth is no longer accelerating, demand continues to outstrip supply throughout most of the country and the desire to trade-up among existing homeowners remains strong.”
It “remains a sellers’ market” as there are still plenty of buyers looking for a new home, Mike Staton, director of Mansfield’s Staton Mortgages said.
First-time buyers were particularly active in August and the market had been relatively stable despite the month usually being quiet, he said, adding: “It may be that people are keen to buy, lock into a low rate and batten down the hatches before we enter a time of potentially extreme economic turbulence.”
Showing there is still enough demand, Ross McMillan, owner at Glasgow’s Blue Fish Mortgage Solutions said he was still seeing two or three buyers competing for a property, despite previously having 12.
He said: “While there is still a general lack of supply, sellers' expectations are also becoming more reasonable and generally more in line with valuations.
“Unlike the global financial crisis of 2007/08, arguably the most important element of the housing market is that it remains fluid and functional so while prices may stagnate or fall slightly due to the cost of living crisis, I am confident that demand will remain and transactions will continue, albeit at lower levels than the past two years."
Because many sellers have spent so much money buying their homes, they will want to hold out for near-asking prices, meaning it is unlikely to become a buyers’ market, Samuel Mather-Holgate of advisory firm, Mather & Murray Financial said. He added: “This is why I expect prices to hold up, but transaction levels to sink like a brick.”