London's homes cost 150% more than in North

The gap between the price of an average London property and the North now stands at £172,795 - 40 per cent more than five years ago.

Average prices in London stood at £286,658 in the first three months of this year, compared with £113,863 in the North, said the building society.

Prices overall in southern regions are now 65 per cent higher than their northern counterparts, compared with a 44 per cent gap five years ago. House prices have suffered across the whole of the North, in contrast with the South where all regions except East Anglia have enjoyed price rises.

London significantly outperformed the rest of Britain over the past five years, with a 17 per cent rise in prices far outstripping a modest 1.3 per cent increase across the country as a whole. Over the same period, the North was the country's worst performer, with prices falling 7.8 per cent. London property prices are also 76 per cent ahead of the £162,379 UK average.

An influx of foreign buyers, a shortage of housing supply and the capital's more buoyant economy is insulating the London market, experts said.

Capital Economics property economist Paul Diggle said: "London prices have bounced back more strongly than other regions in the last year or so and are more resilient to the falls that have come through elsewhere across the country. But prices look more stretched in the capital even relative to higher earnings."

Nationwide's figures showed average London prices up 2.3 per cent in the first three months of this year, more than double the one per cent rise in prices seen across the country overall. The capital's 2.1 per cent rise in house prices over the last year also compares favourably with a 0.3 per cent fall in the wider UK market and a 1.5 per cent fall in the North.

In London, Brent saw the strongest price growth with prices up seven per cent year-on-year although Waltham Forest was the weakest performing borough, with prices down six per cent year-on-year.

Nationwide's monthly figures revealed a surprise 0.5 per cent rise in prices across the country overall this month but economists warned that the prospect of cuts, faltering consumer confidence and interest rate rises threaten the market.

IHS Global Insight economist Howard Archer said: "High unemployment, elevated debt levels and still significant difficulties in getting a mortgage do not bode well for house prices."