The latest figures put the average UK property price at £263,788.
Robert Gardner, Nationwide's chief economist, attributed the slowdown to the continued fallout from the mini-Budget in September.
He said: “While financial market conditions have stabilised, interest rates for new mortgages remain elevated and the market has lost a significant degree of momentum.
“Housing affordability for potential buyers and home movers has become much more stretched at a time when household finances are already under pressure from high inflation.”
Gardner said the market looks set to remain subdued in the coming quarters, adding: “Inflation is set to remain high for some time and base rate is likely to rise further as the Bank of England seeks to ensure demand in the economy slows to relieve domestic price pressures.”
While the outlook is uncertain, Gardner said, a relatively soft landing is still possible.
He said: “Longer term borrowing costs have fallen back in recent weeks and may moderate further, especially if investors continue to revise down their expectations for the future path of base rate. Given the weak growth outlook, labour market conditions are likely to soften, but they are starting from a robust position with unemployment still near 50-year lows.
“Moreover, household balance sheets remain in good shape with significant protection from higher borrowing costs, at least for a period, with around 85% of mortgage balances on fixed interest rates. Stretched housing affordability is also a reflection of underlying supply constraints, which should provide some support for prices.”
Commenting on the data, Alex Lyle, director of Richmond estate agency Antony Roberts, said the new year will show the importance of experience, adding: ‘The market has proved to be remarkably resilient, despite increasingly challenging conditions. This slowdown in price growth is not surprising as we are finding that sellers are being sensible and considering lower offers, sensing that sentiment has shifted a little over the past few months.
‘We are likely to see a lot of soft marketing in the run-up to Christmas with agents and sellers testing the market to find the right level before launching new stock in the new year.
‘Those agents who have joined the industry in the past 18 months and found the market to be easy could well find that next year is a very different story. Good agents will come into their own, while some of the lesser-experienced may well fall away.”
Tom Bill, head of UK residential research at Knight Frank, added: “The impact of the mini-Budget continued to reverberate in November, with the largest monthly fall in house prices since the early days of the pandemic. Financial markets have been reassured by new government’s economic plan but the mortgage market is playing catch up.
“Mortgage rates should keep edging downwards as the effects of the mini-Budget wash through the system, which should settle the nerves of buyers and sellers, even as a 13-year period of ultra-low borrowing costs comes to an end.”
He said Knight Frank expects house prices to fall by 10% over the next two years, adding: “The reality of higher rates will bite more after Christmas. Mortgage offers made before the mini-Budget will begin to lapse and increase downwards pressure on prices from 2023.”
Nathan Emerson, chief executive of agency trade body Propertymark, said members are reporting a rebalance within the market as competition for homes starts to slow.
He said: "It is no surprise that the house price growth is also slowing in line with this.
“This knock-on effect being seen in prices achieved is positive as we need to see this settle in line and a return to a more realistic and sustainable market. However, prices remain higher than last year, and with the Stamp Duty threshold raised, it remains a good time to buy or sell a property.”