Londoners will be priced out of large parts of the capital as figures show the property price gap between boroughs has widened sharply.House prices in traditional up-market areas such as Westminster and Kensington & Chelsea have soared in the last three years.
At the same time property prices in many of the less well-heeled parts of the capital like Hounslow and Barking have fallen.
In some areas the housing market is significantly underperforming the UK market making it harder for people to move between different parts of the city.
It comes as Halifax said house prices showed a slight increase last month but were unlikely to move much over the rest of this year.
Prices rose by 0.5% month-on-month across the UK in May, following a 2.3% monthly fall in April, to reach £160,941 on average.
The price gap in London, revealed in data from estate agent Knight Frank, highlights the effect that demand from wealthy overseas buyers is having on London’s housing market.
In Westminster, prices rose 32 per cent in the three years to April taking the average house price in the borough to £752,785.
In contrast, prices in Barking and Dagenham fell 0.5 per cent over the same period to £218,597.
Overall, house prices grew 8.3 per cent in the capital over the three years.
Liam Bailey, head of research at Knight Frank, told the Financial Times: “The wide spread in performance within London reflects the fact that the outer London boroughs generally share much in common with the wider UK market. It is the globalised housing market in central London which has created the chasm in performance.”