LONDON - British house prices rose less than expected this month after expanding at the fastest pace in 18 years in March, figures from mortgage lender Nationwide showed on Friday.

Annual price growth fell to 12.1% in April from 14.3% in March, after a 0.3% monthly increase which was the smallest since September and well below economists' average forecast in a Reuters poll for a 0.8% rise.

Nationwide said prices were being supported by a strong job market, but it expected momentum to weaken this year due to stretched affordability and falling real incomes as pay fails to keep up with inflation.

"We continue to expect the housing market to slow in the quarters ahead," Nationwide chief economist Robert Gardner said.

"Moreover, assuming that labour market conditions remain strong, the Bank of England is likely to raise interest rates further, which will also exert a drag on the market if this feeds through to mortgage rates," he added.

Most economists expect the BoE to raise interest rates to 1% on May 5, the highest since 2009, and financial markets see interest rates reaching 2.25% by the end of the year.

(Reporting by David Milliken; editing by William James)