House prices in London have soared at their fastest rate in 27 years, smashing through the £400,000 average property mark for the first time, Nationwide has reported.
The building society said that house prices in the capital had jumped by 25.8% annually, now making it more than double the average UK house price, at £400,404, and 30% higher than its 2007 peak.
The gap between prices in the capital and the rest of the country grew to the "widest it's ever been", Nationwide added.
Meanwhile, house prices in the country as a whole lifted by 11.8% year-on-year across the UK in June to reach another new all-time high of £188,903 typically,
The annual uplift is the biggest jump seen since January 2005 and a 1.0% month-on-month price increase also helped to push average prices to £2,391 above a previous peak in cash terms which had been recorded just one month earlier, in May.
Strong annual price gains were not just confined to London and southern England. Nationwide said in Southern Scotland, which includes Ayrshire and the Borders, prices are up by 14% on the previous year, as are prices in Belfast in Northern Ireland.
In South Wales (West), which includes the Vale of Glamorgan, Bridgend and Swansea, house prices have seen a 12% year-on-year jump.
After London, Cambridge was named as the top-performing city for the housing market. Prices in Cambridge have surged by 20% over the last year to reach £419,187 typically. St Albans was the third strongest-performing city, with values lifting by 18% annually to reach £451,800 on average.
Newcastle was named as the worst-performing city, with a 3% annual uplift taking prices there to £181,473 typically.
Across the UK, all regions recorded annual price gains for the fourth quarter in a row, with the largest being in London and the smallest in Scotland, where values have risen by 5.4% annually to reach £141,872 on average.
In Wales, property prices are up by 9.3% on a year ago, now standing at £145,812 typically, while in Northern Ireland, where the housing market is still recovering from some sharp falls seen in the wake of the financial crisis, values have risen by 8.4% annually to reach around £117,150. Prices in Northern Ireland are still around half the level they were at their peak.
Prices lifted annually by 16.4% in the Outer Metropolitan commuter belt area, by 14.0% in the Outer South East, by 9.8% in the South West, by 9.5% in East Anglia, by 8.3% in the East Midlands, by 8.2% in the West Midlands, by 8.1% in the North, by 7.1% in the North West and by 7.0% in Yorkshire and Humberside.
Robert Gardner, Nationwide's chief economist, said house prices surpassed their 2007 peak levels in the second quarter of this year, "just as UK economic output is likely to have surpassed the high water mark reached before the financial crisis".
He said the latest figures show there is still "significant variation" in the performance of the housing market across the UK. Across the country as a whole, prices are just under 1% above their pre-financial crisis peak, but when London is taken out of the equation they are 0.4% below this previous high. Prices in southern regions are now above their 2007 peaks, while those outside the South are still below this level.
Last week, the Bank of England moved to put curbs on riskier mortgage lending by announcing that loans of 4.5 times a borrower's income or higher should account for no more than 15% of new mortgages issued by lenders.
The Bank also said that lenders should apply a new "stress test" ensuring that borrowers can keep up their mortgage repayments in the event of a rise of up to 3% in interest rates over the first five years of the loan.
There have already been some signs of a slight slowdown in the housing market since the launch of stricter mortgage lending rules under the Mortgage Market Review (MMR) at the end of April, which mean mortgage applicants must be quizzed in more detail about their borrowing habits.
Experts have said it is too soon to know whether the impact of these new rules will be temporary, as they bed in, or more longer-lasting. It has also been said that a continued shortage of properties on the market is still helping to push prices upwards.
Gardner said that the Bank's new measures are "unlikely to have a significant impact on housing transactions or the pace of price growth in the near term".
He continued: "Most major lenders are already using a stress rate in their affordability calculation that is broadly consistent with the new stress test.
"Similarly, the proportion of house purchase loans at or above 4.5 times borrowers' income is currently some way below the 15% cap."
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Gardner said that the Bank's new policy measures, alongside the MMR rules, should help to limit the risk of house prices becoming detached from earnings, while mounting speculation over possible interest rate rises may also dampen housing market activity in the months ahead.