Land Registry figures show two-paced housing market

Robert Peston reports on London as ''a ghetto for the world's super-wealthy''

More evidence of a two-paced housing market has been revealed in the latest property price figures from the Land Registry.

House prices rose by 13.8% in the year to the end of February in London, but fell by 1.3% in north-east England.

The average home in England and Wales cost £170,000 in February, the Land Registry said.

This was up 5.3% on a year earlier but was still more than £11,000 below the price peak of November 2007.

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Price rises in London soared above this annual average increase, with a home in the UK capital typically valued at £414,356.

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There was a 7.1% annual increase in the rest of south-east England, taking the average home to £223,733, the Land Registry said.

Price increases have been driven by flats. Prices rose by 7.6% in the year to the end of February.

But the acceleration in property values has not been matched north-east England, where the average price stood at less than £100,000 in February.

Oliver Atkinson, director of online estate agents, said: "What this data once again underlines is that there are very much two property markets in the UK at present. One that's 'foot to the floor' and one that's still flagging."

The figures come the day after the Bank of England said it would test whether lenders could withstand a shock in the property market. It found buyers were spending a higher proportion of their incomes on mortgages than at any time since 2005.

The bank's Financial Policy Committee (FPC) said it would be "vigilant to emerging vulnerabilities" - in other words, the possibility of a housing bubble.

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