London Home Prices Hit Record High

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The average price of a home in London is now £318,214 ($485,180), five percent higher than the peak in 2007, according to new data released today by Nationwide.

Cheap credit, an improving economy and the continued influx of international buyers have helped push prices in the capital, Nationwide said.

The prices in London are a sharp contrast to the rest of the U.K., where the overall average price now stands at £168,941, up from £162,262 in December. U.K. prices are rising at the fastest rate since 2010.

But prices in the overall U.K. market are still 9 percent below 2007 levels, while London prices are hitting new levels. If London is removed from the overall U.K. average, the city's prices are more than twice as much as the rest of the U.K.

While Nationwide is considered one of the more conservative benchmarks of the market, the data is in line with recently released reports from Halifax and the Royal Institute of Chartered Surveyors.

The wider availability of mortgages is certainly playing a factor. New government programs, the Funding for Lending Scheme (FLS) and the Help to Buy scheme, helped boost market confidence, analysts say. The Council of Mortgage Lenders recently reported that May was the best month for lending since 2008.

"The London property market is an extraordinary microcosm," Jonathan Hopper, managing director of property search consultants Garrington, told the Guardian newspaper. "It has effectively broken free of the rest of the UK and is operating in its own stratosphere.