The mortgage lender said house prices rose by 0.5 percent in December, lifting the annual rate to 3.0 percent from 2.4 percent in November.
That was still the weakest full-year performance since 1995 and follows several years of double-digit gains as a series of interest rate hikes took the wind out of the booming market.
But economists said fears of a housing crash so widespread just a year ago look to have been unfounded as evidence builds that the market is gently recovering though a return to boom conditions seemed very unlikely.
"While there is uncertainty about the economy at present we still expect he next move in interest rates will be down and that this is likely early in 2006," said Fionnuala Earley, economist at Nation-wide.
Nation-wide is predicting house price rises of between 0 and 3 percent in 2006.
Nation-wide said the average British home cost 157,250 pounds in December, or up around 13 pounds a day over 2005. That compared with gains of almost 50 pounds a day last year.