House prices: gap between London and the rest of the UK ‘widest in 40 years’

The average home in London is worth more than twice the average home outside the capital – a difference approaching £200,000.

London property now costs 100pc more than property elsewhere in Britain. In pounds and pence the difference in price between the average home in and outside London is now £183,000, according to data from the UK’s largest building society.

The gulf has never been as great since detailed data began to be collated in the late 1970s. Although London prices have always been at a premium, in that initial period – between 1978 and 1984 – the gap between the capital and elsewhere was less than 40 per cent.

Rory Penn, of London estate agent VanHan, said the surge in London prices was causing homeowners there to “stay put rather than make the natural progression out to the countryside, fearful that they will never afford to buy in London again.”

This trend, he said, was “further contributing to the shortage of stock for sale in the capital.”

He added: “In some areas the shortage of decent property for sale is creating a frenzy, with packed open houses, sealed bids and gazumping.”