“The gap between London house prices and the rest of the United Kingdom has continued to reach new highs”, said Robert Gardner, Nationwide’s chief economist.
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Nationwide’s figures, which are based on mortgages it arranged between July and September, show a marked difference in price growth, and prices, around the country.
The price of a typical home in the capital (£443,399 according to Nationwide) is more than double the United Kingdom aggregate and more than three and a half times the price of the typical property in the cheapest United Kingdom region (the North of England).
“The upside for housing market activity and prices is expected to be constrained by more stretched house prices to earnings ratios, tighter checking of prospective mortgage borrowers by lenders and the likelihood that interest rates will start rising gradually before too long”.
Meanwhile, those in the North – which the report takes to be the Midlands as well as Yorkshire and Humberside, the North West and North East – have edged up by just one per cent in the last 12 months.
He said: “However, the risk remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability”.
The area around London has also seen strong growth, with an annual rise of 9.5% recorded in the commuter belt outside the capital.
House prices grew around 3.8% in the year to September, the biggest annual growth since May, according to Nationwide.
“Eight United Kingdom regions recorded a slowdown in the annual rate of growth, while five saw acceleration”.
The price gap between the north and south of England has also continued to grow, for the 26th consecutive quarter.
Archer said that he thinks house prices will rise a staggering 7% in 2015 and an additional 6% in 2016, suggesting that stabilisation is still far from a reality.
Last week, property analyst Hometrack said the price gap between property values in London and those in other major United Kingdom cities was at an all-time high. Prices in the outer metropolitan area average £326,785. However, at an average of £127,562, prices are still 44% below their pre-crisis peak.
Scotland saw a 1.3% year-on-year fall in house prices, taking them to £140,402 on average.
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In Wales the average price for a property is £146,854, a 1.9pc annual increase.
