Research by the property firm suggested that the average house price in England and Wales hit £227,478 during January, a 3.1% rise on the same month last year.

David Brown, commercial director of LSL Property Services, said that house prices had jumped around £7,000 in the last 12 months thanks to a competitive mortgage market.

“Market conditions are certainly improving. Funding is cheaper, thanks to a combination of the Funding for Lending Scheme and an improvement in investor confidence. And mortgage lenders have started competing for more business from high LTV borrowers, which is driving down mortgage rates to record lows.

“Lending criteria are becoming less restrictive, so borrowers no longer have to cross such a painfully high financial threshold in order to get a mortgage.”

The report showed that much of the national growth was thanks to a strong performance in the Greater London market as house prices in the capital and surrounding areas grew 9.4% to £431,042.

North eastern town Hartlepool saw the biggest year-on-year rise outside of London with the house prices jumping 8.4% in the past year, this helped the North East and Cumbria region have the most burgeoning market outside London and the South East.

Properties in Wales struggled in the same period with the average price in the country falling 1.3%, property values in in Ceredigion and neighbouring Gwynedd plummeted 8.1%.

“The capital is in a league of its own,” added Brown.

“Sales activity and prices in London are charging along at a furious pace, which is dragging national house prices up on its coat tails. Take the capital out of the equation, and the average rate of house price growth in England & Wales falls to a mere 1%, reflecting a slower rate of improvement outside of the south-east.

“We’re seeing a three-speed housing market emerge. On the top rung are fickle foreign buyers and the ultra-prime, with London on the second rung, and the rest of the country languishing at the bottom.”