London's house prices rise at fastest rate in six years

House prices in London are rising at their fastest pace for six years, and the gap between property values in the capital and the rest of the country is now the largest ever recorded, a new report says today.

The Royal Institution of Chartered Surveyors (RICS) said the "mini-boom" in London and the south-east had widened the north/south property price divide. Its survey for June is the latest in a string of upbeat housing market reports. RICS said 28% more surveyors had reported a rise in house prices than a fall, compared with 21% in May.

One member firm based in Chelsea, Carter Jonas, reported that prices at the top end of the market "have never been more buoyant", with multimillion-pound homes selling for 10% to 15% above the asking price. Richard Cotton at Cluttons, serving the Hyde Park area, said: "Purchasers seem to be desperate and sometimes are paying staggering prices."

RICS said last month's rise in prices came despite rising unemployment and volatile markets. Ian Perry, a spokesman for the organisation, said: "Economic divisions used to be characterised by unemployment and economic decline but are now characterised by the difference in house prices. London has become a property kingdom created by finance."

The south-east recorded its sharpest price rises for four years in June, and north-west England also enjoyed above-average growth. Elsewhere in the country, prices rose modestly or stayed flat.