House prices in all UK regions rise for first time since Lehman Brother's collapse as average house price hits 5 year high House prices hit highest level since June 2008 London property values now 8% higher than their previous peak Manchester and Newcastle see values jump 10% and 8% Chancellor to give Bank of England greater powers to control property bubble North/South divide widens: typical property in the south is 74% more expensive than in the north The average UK house is now worth 5 per cent more than a year ago, marking the strongest rise in values seen since July 2010, figures showed today. In what now seems a broad-based recovery for the property market, all 13 regions of the UK saw a rise in house prices for the first time since the start of the financial crisis, the latest house price index from building society Nationwide showed. The average house price has climbed to a five-year high after property values rose at their fastest pace for three years in September, it added. Asset bubble: House price have grown by more than three times average wages in the last twelves months Prices are also up by 0.9 per cent compared to a month earlier following a 0.7 per cent rise in values in the usually quieter month of August. As a result, the typical UK home is now worth £172,127 the highest level since June 2008 when the average property was worth £172,415. It also means average property values have risen by just under £9,000 in the past year. Despite the rapid increase in property prices in the last year, the average house price value remains 7.5 per cent below its October 2007 peak of £186,044. But given the increase in values so far this year, some economists have already warned this could be surpassed in the next twelve months. London saw the largest annual increase in values of 10 per cent and at £331,338 typically they are not only at an all-time high but are sitting 8 per cent above their 2007 peak. Funding for lending: The rise in house prices has come in conjunction with increased access to cheap money for mortgage lenders from the Bank of England Other cities have seen similar rises in values in the past year. Manchester also saw a 10 per cent increase in house price while in Newcastle recorded they are 8 per cent higher. But elsewhere prices have fallen on an annual basis. Carlisle has seen a 3 per cent fall in values since last September and in Southampton average property values at lower by 2 per cent. Despite all regions across the UK seeing house price growth, the gap between average property values in the North and those in the South of England has widened to a new high, topping £100,000 for the first time. A house in the South of England is typically 74 per cent more expensive than one in the North. Prices in southern regions have risen by 6.1 per year-on-year and this increase is almost double the rate of the 3.1 per cent rise seen in the North. Price trend: The long term house price trend has begun to rise again in the last twelve months Nationwide said that the 10 per cent year-on-year growth in London marks the first time the capital has seen a double-digit increase since 2010. East Anglia saw the second highest annual increase in house prices at 6.6 per cent. House prices were up by 3.6 per cent in Wales year-on-year and by 2.2 per cent in Scotland. Northern Ireland saw its first annual price rise since 2007, albeit a small 0.9 per cent increase, indicating that prices there are starting to stabilise, Nationwide added. Prices stable: House prices remain below their 2007 peak but this could be reached within the next year economists are warning Northern Ireland has the lowest average house prices out of all the regions, at £108,671. The lowest year-on-year price increase was recorded in the North of England, at 0.2per cent. Nationwide's chief economist Robert Gardner said the acceleration in house price growth from a subdued pace last year has been "surprisingly quick," although prices are still way off their previous peaks in many areas of the UK. He said: "Overall, UK house prices are still around 8% below their 2007 highs. However, there is still significant regional variation, with prices in Scotland, Wales and the North of England around 12 per cent to 14 per cent below their previous peaks, while in many southern regions prices are 5 per cent to 7 per cent lower. Affordable: House prices in relation to average earnings are slowly creeping up once more although they remain well below peak levels for now Only in London are prices at an all-time high, 8 per cent above their previous peak. Mr Gardner warned that house building is still running at levels below what is needed to keep up with demand, which will fuel the upward pressure on prices. He said: "The risk is that if demand continues to run ahead of supply, affordability may become stretched. House price growth has been outstripping average earnings growth since the middle of the year, for the first time since late 2010. At the moment, "ultra-low" interest rates are helping to support the affordability of mortgage payments, he said. A typical mortgage payment for a first-time buyer is around 29 per cent of their take-home pay, which is in line with the long-term average. It comes as Chancellor George Osborne made his first public acknowledgement that the Government's Help to Buy risked causing a house price bubble by announcing the Bank of England would be granted greater powers to control the market. Broad based: For the first time in five years all regions of the UK saw an increase in property values although in some regions the increase was very modest The Chancellor's intervention comes amid growing concern among economists, some housing experts and even within some quarters of the Coalition Government that Help to Buy will fuel a fragile recovery in the economy based on a recovery in house prices, which could be vulnerable to overheating. Business Secretary Vince Cable has voiced concerns on a number of occasions over the last month that the scheme could lead to an asset price bubble. And Howard Archer, UK and European economist at HIS Global Insight, warned today of a "mounting danger that house prices could really take off over the coming months, especially as a shortage of new properties for sale could be a significant factor in some areas, notably London and the South East." "Furthermore, already significantly improving housing market activity and rising buyer interest could be lifted appreciably further by the new stimulus measures due to kick in at the start of 2014 (the "Help to Buy" mortgage guarantee scheme). But Mr Osborne said last week "let's not pretend there's a housing boom" and insisted it was important to "go on trying to fix specific problems in our financial system." From January the Help-to-Buy initiative will provide mortgage guarantees on properties worth up to £600,000 but the Bank's Financial Policy Committee will make annual reviews and could recommend that the cap is reduced. It was initially due to only assess the scheme after three years. The FPC could also make loans more expensive by recommending that the Treasury raises the fees paid by lenders for the guarantees.