UK house prices increased by 0.7 per cent in May and were 11.1 per cent higher than May 2013, according to the Nationwide Building Society.
First time buyers are said to be increasingly important in driving the recovery with the Government's Help to Buy playing a supporting role.
The average price of a house is now £186,512 compared to £183,577 last year.
Robert Gardner, Nationwide's chief economist, said: “House prices recorded their 13th successive monthly increase in May, rising by 0.7 per cent.
"As a result, the annual pace of price growth edged up to 11.1 per cent up from 10.9 per cent the previous month.
“There have been tentative signs that activity in the housing market may be starting to moderate, with mortgage approvals in April around 17 per cent below January’s high.
“It is too early to say whether nationally this is indicative of a cooling trend in the wider market. The slowdown may partly be the result of the introduction of Mortgage Market Review (MMR) measures, which may take a few months to bed down.
"The underlying pace of activity should become more evident as we move through the summer months and the impact of MMR becomes clearer.
“However, with mortgage rates close to all-time lows and labour market conditions continuing to improve, underlying demand for homes is likely to remain strong."