The North-South house price divide is once again widening after four years of Northern homes closing the gap.

The average cost of a home in the South was £265,921 at the end of September, a 68% premium on the price of the average home in the North which was £158,636, according to Britain's biggest mortgage lender Halifax.

The group said the gap reached a low of 56% in the first quarter of 2006.

In the year to the end of September, three of the four regions that make up the South saw double digit house price growth, with prices rising by 18.6% in Greater London, 13.7% in the South East and 11.1% in East Anglia. Prices also rose by 8% year-on-year in the South West.

Meanwhile, northern regions were more likely to see single digit growth, with prices edging ahead by just 5.2% in the North West, 5.4% in the North and 4.7% in the West Midlands.

Scotland and Northern Ireland, both classed as being in the North, bucked this trend as they saw annual house price inflation of 14.2% and 29.1% respectively.

Despite the recent change in fortunes, Halifax said the the North has done well over the last five years as the average cost of a home has risen by 97% since the third quarter of 2002, compared with a 53% increase in the South.

As a result, the difference between the cost of the average home in the North and one in the South, although widening, is now only 68%, compared with 115% five years ago.

House prices increased in most regions of the UK during the third quarter of the year with Greater London seeing the biggest gains at 2.3%, followed by the South East at 1.8%.

Martin Ellis, Halifax chief economist, said: "Nationally, house prices in quarter three were 0.9% higher than in the previous quarter.

"The UK economy is in a strong position. Sound market fundamentals, including high levels of employment and a shortage in the number of properties available for sale will continue to support house prices."

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