Annual house price inflation dipped slightly from 3.1 per cent in June to 2.9 per cent in July.
The monthly rate of growth was a modest 0.3 per cent – down from 1.1 per cent in June – taking the average price to £211,671.
It adds to a mixed set of recent data on the health of the housing market, with Halifax’s June index pointing to the slowest growth in four years and NAEA Propertymark’s June Housing Report indicating a first-time buyer- fuelled rebound.
But Nationwide's chief economist Robert Gardner said prices were being supported by a lack of homes on the market.
“This pattern looks set to be maintained in the near term,” he added.
“Survey data point to relatively sluggish levels of new buyer enquiries, but at the same time surveyors report that relatively few properties are coming onto the market - and at a time when the number of homes on estate agents’ books is already close to thirty-year lows.”
Mr Gardner added that a slowing UK economy and pressure on household budgets meant growth would probably remain subdued in the coming months.
He continued: “Nevertheless, constrained supply is likely to continue to provide support for house prices and, as a result, we continue to expect prices to rise by around 2 per cent over 2017 as a whole - only modestly lower than the levels recorded in recent months.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, commented: “Although these figures on the face of it look quite encouraging when one considers the fall in transactions, it is clear that prices are being supported by a lack of property on the market.
“We would have expected transactions in particular to be higher compared with last year bearing in mind how much quieter the market was 12 months ago following the introduction of the stamp duty surcharge.
“On the plus side, activity could be much lower considering current political uncertainty and fortunately there does seem an enthusiasm among serious buyers and sellers to get on with the job in hand. The current climate is also providing an opportunity for first-time buyers at least to better compete for smaller properties.”