House price rises spread to every region in Britain as average cost of home leaps by 5 per cent Typical UK home is now worth £172,127 London saw biggest prices rises in the country - up 10% year-on-year Average home in the capital now worth £331,338 Housing bubble could be stoked as demand outstrips supply, expert warns Government's Funding for Lending and Help to Buy fuelling demand House prices rose at their fastest annual pace in more than three years in September - stoking yet more fears of a property bubble. For the first time since 2007, all 13 UK regions have seen annual house price growth, according to Nationwide. The figures are signs that 'the pick-up is becoming increasingly broad-based', the building society said. On the up: House prices rose by five per cent since last year - stoking fears of a property bobble developing But experts warned that a housing price bubble could emerge as demand for housing continues to far outstrip supply. The annual rate of house price increases rose to 5per cent across the country, marking the strongest uplift seen since July 2010. Prices are also up by 0.9per cent month-on-month, following a 0.7per cent monthly increase seen in August, meaning the typical UK home is now worth £172,127. Fears have been growing in recent months that Government schemes such as Funding for Lending and Help to Buy, which have widened mortgage availability and encouraged more low-deposit lending, could be helping to stoke up a house price 'bubble', with people overstretching themselves. But these concerns have been dismissed by lenders and by Chancellor George Osborne, who recently said that house prices have 'barely grown' outside London. Boom time: London has seen the biggest rise in property prices than anywhere else in the country Nationwide's chief economist Robert 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 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 8per cent below their 2007 highs. However, there is still significant regional variation, with prices in Scotland, Wales and the North of England around 12per cent to 14per cent below their previous peaks, while in many southern regions prices are 5per cent to 7per cent lower. Only in London are prices at an all-time high, 8per cent above their previous peak. Widening gap: The difference between the cost of homes in the north and south of England has continued to grow He added: 'The risk is that if demand continues to run ahead of supply, affordability may become stretched. 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 29per cent of their take-home pay, which is in line with the long-term average. On a regional level, the biggest increases continued to be felt in London, where prices have risen by 10per cent year-on-year and at £331,338 typically they are not only at an all-time high but are sitting 8per cent above their 2007 peak. But the pick-up remains patchy. Manchester also saw a 10per cent increase in house prices over the last year and Newcastle recorded an 8per cent rise - but at the other end of the spectrum, prices were down by 3per cent annually in Carlisle and by 2per cent in Southampton. Bubble trouble: House building is not keeping up with demand, an expert warned A house in the South of England is typically 74per cent more expensive than one in the North. Prices in southern regions have risen by 6.1per cent year-on-year and this increase is almost double the rate of the 3.1per cent rise seen in the North. Nationwide said that the 10per cent year-on-year growth in London marks the first time the English capital has seen a double-digit increase since 2010. East Anglia saw the second highest annual increase in house prices at 6.6per cent. House prices were up by 3.6per cent in Wales year-on- year and by 2.2per cent in Scotland. Northern Ireland saw its first annual price rise since 2007, albeit a small 0.9per cent increase, indicating that prices there are starting to stabilise, Nationwide said.