View the hotspots and a region-by-region breakdown of property prices

The North-South divide in house prices continues to widen, according to a report published today, as buoyant conditions in London and the South East drive prices ever higher while property values stagnate in northern cities such as Liverpool and Newcastle.

Nationwide’s quarterly assessment of housing market found that prices have not increased at all in Liverpool over the past year and moved just 3 per cent higher in Newcastle and Birmingham. Over the same period, the cost of the average property in London rose by more than 15 per cent to almost £300,000.

Property prices in London are now, on average, almost 120 per cent higher than the most northerly counties of England. The cost of the average property in Yorkshire & Humberside, an area that was recently hit by severe flooding, is just £155,000 while the average price in the North West is just £158,000.

Fionnuala Earley, Nationwide's chief economist, said: “In England, the North-South gap that began opening up last year remained significant in the second quarter. House price growth in the South outpaced that in the North by 5.6 percentage points. Within England, London saw the fastest pace of price growth by a considerable margin. In fact, annual growth in London outpaced the average for England as a whole by 6.1 percentage points.”

Experts say urban regeneration in the cities of northern England and the Midlands, such as Liverpool and Birmingham, has increased the supply of properties and is depressing prices. Liam Bailey, head of residential research at Savills, the estate agent, says: "Tens years ago, very few people lived in these city centres but now there are thousands of new build developments. The problem at the moment is that there are too many developers and not enough buyers. Meanwhile, a boom in the financial services industry, high immigration and a chronic shortage of supply is supporting price growth in London and the South East."

The Nationwide also reports that house prices in parts of Northern Ireland have spiralled to such an extent that they are now on a par with London. In Belfast, average property prices rose to £300,229 in the last quarter. Annual price growth across Northern Ireland has accelerated to 54 per cent as the region benefits from the so-called "peace dividend".

“The speed of house price growth in Northern Ireland remains astonishing and well above that of other UK regions" Ms Earley said. "Recent growth rates appear unsustainable, and it would be healthy for the market to see some cooling," she added.

Average earnings in Northern Ireland are still lower than the UK average, suggesting that affordability is deteriorating fairly rapidly and that the market here could be more vulnerable than in other regions.

In a separate development, the Council of Mortgage Lenders (CML) reported today that first-time buyers’ struggle to get on to the property ladder worsened during May, with affordability reaching its worst-ever level. The average first-time buyer needed to borrow a record 3.37 times their income to buy a home during the month, up from 3.33 times in April.