The average cost of a home in London has broken through the £300,000 barrier for the first time, figures showed today.

Britain’s biggest mortgage lender Halifax said the average price of a property in the capital was now £313,122. At the same time average house prices in the South East breached the £250,000 mark to stand at £259,904.

However some regions saw modest falls during the second quarter of the year, with prices dropping by 2.8 per cent in Wales, 1.1 per cent in the West Midlands and 0.4 per cent in the South West.

The group said the gains during the second quarter of the year meant the average property in London was now more expensive than the new £300,000 threshold at which inheritance tax kicks in, while someone in the South East buying an average-priced property would now have to pay stamp duty of 3 per cent of their home’s value rather than 1 per cent.

Halifax criticised the Government for failing to increase the thresholds for both taxes in line with house price inflation - the mortgage lender calculated that the inheritance tax threshold would be £490,000 if it had risen at the same rate as inflation; the threshold at which 3 per cent stamp would start at £720,000 not £250,000, and people would not have to pay the 4% rate until they bought a home worth £1.4 million, rather than the current £500,000.

Northern Ireland saw the strongest house price growth during the three months to the end of June, with the average cost of a home there rising by 8.5 per cent. In Greater London prices rose by 4.9 per cent during the period, while in the North they were 4.3 per cent higher and in the South East they increased by 4.2 per cent.

The growth in the North pushed house prices in the region above the £150,000 threshold for the first time to average £155,188.

Scotland and Yorkshire and the Humber are now the only regions of the country where the average home still costs less than £150,000, with prices in these regions standing at £140,262 and £149,051 respectively.

Northern Ireland also saw the fastest house price growth year-on-year, with property prices soaring by nearly 47 per cent during the 12 months to the end of June. Halifax said the growth had been driven by a combination of a strong local economy, high levels of immigration and high demand from second homebuyers and buy-to-let investors in the Republic of Ireland. With average property prices of £228,790, Northern Ireland is now the most expensive part of the UK to buy a house outside of London and the South East. This compares with two years ago, when only Scotland had average house prices lower than Northern Ireland.

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