The cost of the average London home has risen to just under £350,000, according to the latest FT house price index published on Friday, well above the £200,415 average for the rest of the country, indicating the growing wedge between prices in the capital and the regions.

The FT index, which is based on Land Registry data for England and Wales, shows that, despite four interest rate rises since August 2006, the London property market is still hot. This is in contrast to the rest of the country where house price inflation is subdued.