The rise means the average home in the UK is now valued at £172,127. On an annual basis house prices have increased by 5% in the 12 months up to September.
Despite strong price growth in cities such as Manchester and Belfast London continues to lead the way with a 10% price increase in the third quarter of 2013.
London prices are now at an all time high but overall UK house prices are still some 8% below the 2007 peak.
Nicholas Ayre, managing director of Home Fusion, said: “The 10% double-digit growth in London house prices in the third quarter clearly illustrates that the capital's housing market is outstripping the rest of the country.
“You have the London market and then you have the rest of the country so it almost needs its own house-price index and special consideration.
“The gap between north and south has become more pronounced than ever even though prices rose in every region in the UK, suggesting the recovery is becoming more broad based.
“It is no wonder that George Osborne is beginning to get twitchy and is giving the Bank of England powers to put the brakes on Help to Buy if it gets out of hand.
“Although fears of a house-price bubble are overstated, it's important not to be complacent. A bubble implies that people are buying anything at any price and they aren't but the fear is that if demand continues to surge at the levels we are seeing, this will start to happen.
“Potentially reducing the cap at which borrowers can buy under the second part of Help to Buy to less than £600,000 might make a lot of sense.”
