The average price of a home in London rose to £499,997 in September, according to the latest figures from the Land Registry.
As prices have been rising consistently, the typical value is likely to reach the half a million mark in October.
Property values across England and Wales rose by 5.3% in the year to the end of September, the data reveals.
The Land Registry values the average home at £186,553.
Earlier in the week, the Centre for Economics and Business Research said a lack of properties for sale was pushing up prices.
Prices in London recorded the fastest annual rise in September, at 9.6%, the Land Registry said. Values rose by 1.8% between August and September.
At the opposite end of the spectrum, house prices in the North East of England fell by 0.3% from a year earlier, pushing down the average price in the region to £99,559.
That means the house price gap across England and Wales is £400,438.
"That average prices in the capital are just a whisker off half a million pounds reinforces how buying in the capital has become a pipe dream for most first-time buyers," said Rob Weaver, director at Property Partner.