The average cost of a home in London has risen to £500,000, while the typical price tag in north-east England has slipped below £100,000, according to official data that graphically illustrates the north-south divide in house prices.

Property prices in England and Wales rose by 1% in September to reach an average of £186,553, said the Land Registry. That is around £6,000 higher than the average selling price of a home at the peak of the last property boom in late 2007.



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However, the headline figures mask wide regional variations. While the average home has increased in value by 5.3% over the past year, the typical London property has notched up a 9.6% rise to reach £499,997.



Ten London boroughs have seen annual price growth of at least 10%, including Newham (13.6%) and Greenwich (12%), though prices are flat or falling on an annual basis in a couple of boroughs, including Camden and Hammersmith & Fulham.



In the south-east excluding London and eastern England, prices have jumped by 8.5% and 8.3% over the past year, rising to 15% in Reading, 14% in Luton and just under 11% in Thurrock, Essex.



By contrast, in north-west England the annual rate of price growth is running at 2.5%, taking the average cost there to £115,594.



The north-east was the only region where prices have fallen on an annual basis. There, a 0.3% decline last month means the average cost of a home has dipped below £100,000 and now stands at £99,559.



Jonathan Hopper, managing director of buying agents Garrington Property Finders, said London’s “half-million milestone” was inevitable, but added: “The average London property price won’t stay at £500,000 for long. Bullish sentiment has driven annual price inflation in the capital close to double digits again, and the half-million mark could soon be forgotten.”



He said the data showed that England’s north-south divide remains as strong as ever, adding: “Even though the north-west has reversed the sudden month-on-month drop in prices it saw in August, prices in the north-east have slipped back into negative territory. By contrast, much of the south and east looks like one giant hotspot, as the national picture returns firmly to type.”



Howard Archer, UK economist at consultancy IHS Global Insight, said he expected house prices to rise by around 6% in 2016 on the back of what is likely to be a similar increase in 2015.



“We believe house prices are likely to see pretty solid increases over the coming months, but will not race ahead,” he added. “Higher interest rates are unlikely to have a major dampening impact on housing activity for some time to come. Interest rates look increasingly unlikely to rise until well into 2016, while the Bank of England is stressing that when interest rates do start to rise, they will only move up gradually and to a limited extent.”

