North-South split as house prices soar

The average property price now stands at £248,000 and this marks the third time in just four months that the Office for National Statistics (ONS) index has hit a new peak, after records were reached in both August and October last year. Prices rose by 0.5 per cent month-on-month in November, following a stronger 1.4 per cent rise in October.

Predictably London recorded the strongest annual growth but every region saw increases, with prices in the South East seeing the next biggest year-on-year lift in the English regions at 4.5 per cent.

The North recorded the smallest year-on-year growth in prices, with a 0.6 per cent annual increase taking average prices in the region to £163,000.

The average property price in London is £441,000 and prices in the English capital are now almost one-fifth higher than their 2008 peak.

Several housing market studies have pointed to the housing market revival becoming increasingly broad-based in recent months. According to the ONS report, house prices in the South East and the East of England are also above their previous 2008 peaks.

Howard Archer, chief UK and European economist at IHS Global Insight, said the ONS figures “will likely maintain concern that a housing bubble could really develop in 2014”.

He said: “Consequently, the decision of the Bank of England and the Treasury to end Funding for Lending support for lending to households from January looks a highly sensible decision, although in itself it is unlikely to act as a major brake on housing market activity.”