The average cost of a house in the UK has just reached £100,000 for the first time ever, according to figures published today by the Halifax. UK house prices rose by 1.6% in January the third successive strong increase since October 2001 - considerably more than the 0.2% and 0.1% increases shown by the Nationwide and Hometrack indexes respectively. The Halifax index is now reporting that annual house price inflation is at the lofty level of 16.8%.

Halifax says that the increase in house prices largely reflects a bounce back in confidence from the lows seen in the aftermath of September's terrorist attacks in America and continued supply shortages in the market.

The pace of house price growth has been particularly marked in recent years. House prices have risen tenfold since 1973 when the average price broke through the £10,000 barrier. In fact, the main growth in prices since the average price passed the £50,000 mark in early 1988 has actually occurred in the last three years. Since then, prices have increased by 37% while retail prices have risen by less than 6%.

• But £100,000 won't get you all that much in many parts of the UK, as the index masks wide regional variations. The research shows that £100,000 will buy you:
• A one-bedroomed flat in London or Edinburgh
• A four-bedroomed detached house in West Yorkshire
• A four-bedroomed executive home in County Down, Northern Ireland
• A three-bedroomed semi-detached house in the Midlands

(Source BSA and Halifax)

Regionally, there are significant differences in the pace that prices have risen over the last three years with a substantial north/south divide emerging. At one end of the spectrum, the average price in the North stands at £61,700, compared with £175,900 in Greater London at the top end of the market.

The biggest price gains in the past three years have been in Greater London, the South West and East Anglia where average prices have increased by almost 60%. Moreover, prices in London and the South West, as well as the South East, already comfortably exceed £100,000. Prices in the North and Scotland, by contrast, have risen by approximately 15%.

Indeed, prices in London have doubled in just five years. Most other regions have taken 14 to 15 years to experience a doubling in prices. Prices have risen most slowly in Scotland over the past 20 years with the average price currently double that in 1984.

Looking at the current average house price in the 12 Economic Regions of the UK shows how wide the regional gap in the cost of an average house has become. The cost of a property in Greater London is now almost three times as expensive as in the North compared with only twice as expensive three years ago. The differential between prices in the capital and the UK average has risen from prices in London being 50% above the national average in early 1998 to 75% more expensive now.

Commenting, Martin Ellis, Group Economist at Halifax, said: "The housing market in the UK has reached another historic milestone, albeit one that is not shared by all the regions. £100,000 will buy you a wide spread of properties depending on where you want to live and work. The housing market in January has shown little sign of slowing from the strong growth seen at the end 2001. House prices have risen by over 6% in the last 3 months and by 16.8% in the last year. These figures fit very well with the recent data published on consumer confidence, consumer credit and mortgage growth. The UK consumer is continuing to borrow and spend against a background of a weak US and world economy. However, we continue to expect slowing UK economic growth and rising unemployment will result in an easing in house price inflation over the course of 2002."