Just 10pc of London earners can afford to get on the property ladder in the capital, as house price growth across Britain rose at the fastest rate since 2006.

Values increased by 10.4pc in the year to December, up from 10pc in November, according to lender Nationwide. Prices hit a record high of £254,822, up by an average of £24,000 in 2021. 

This was the largest ever rise in prices in a single year in cash terms. Property values are now 16pc higher than before the pandemic started.

Over the past decade affordability has been most stretched in London, where now only a tenth of earners can afford a typical first-time buyer property, with a 20pc deposit and borrowing four times their income. This has roughly halved in the past decade as wage growth failed to keep up with soaring house prices.

In the South East and South West of England, the top 20pc of earners could afford a home under the same criteria, compared with 70pc in the North and Scotland. 

Raising a deposit is still the biggest hurdle to homeownership, according to Nationwide, with the average first-time buyer requiring £88,000 for a 20pc down payment in the capital. 

Robert Gardner, of the lender, said the “extremely low” stock of homes on the market was propping up price growth.

He added: “Demand has remained strong in recent months, despite the end of the stamp duty holiday at the end of September. Indeed, in the first 11 months of 2021 the total number of property transactions was almost 30pc higher than over the same period of 2019.”