By . Matt Chorley, Mailonline Political Editor . PUBLISHED: . 06:26 EST, 17 September 2013 . | . UPDATED: . 07:02 EST, 17 September 2013 . The huge divide in Britain’s house price boom was revealed today, with only London leaving the regions far behind. The capital saw rises of almost 10 per cent in July, but prices fell in Scotland, Wales and the north of England. To add to the pain, house prices are rising faster for first-time buyers than for those who already own a home. Ministers played down talk of a new ‘housing bubble’ as experts warned the recovery was far below historic trends. Average house prices rose by almost 10 per cent in London in the year to July, but fell in Wales, Scotland and northern England . Struggle: House prices for first-time buyers are rising faster than those who already own a home . The latest House Price Index showed values in England have now exceeded the peak in January 2008. But it is almost entirely fuelled by a sharp rise in prices in London and the South East. The Office for National Statistics said that UK house prices in July were 3.3 per cent higher than in 2012, up from a 3.1 per cent rise in June. But when London and the South East are removed, prices are only up 0.8 per cent. Last week, the Royal Institution of Chartered Surveyors (Rics) suggested that a 5 per cent cap should be placed on annual house price growth to stop any future house price bubble and borrowers taking on too much debt for fear of missing out on a boom. ‘House price growth remains stable across most of the UK, although prices in London are increasing faster than the UK average,’ the ONS said. ‘The year-on-year increase reflected growth of 3.7 per cent in England and 1.8 per cent in Northern Ireland, offset by falls of 2 per cent in Scotland and 0.7 per cent in Wales.’ In July prices paid by first-time buyers were 4 per cent higher than a year earlier. By comparison for existing owners prices were only 3 per cent up. Chancellor George Osborne has announced plans for the government to guarantee 95 per cent mortgages under the Help to Buy scheme. But Business Secretary Vince Cable has warned the plans risk fuelling a new housing boom in areas where property prices are already soaring while pricing first-time buyers out of the market. London's house prices are now double those in many areas, and rising faster . The House Price Index in England is now higher than the peak in January 2008, but other parts of the UK are still struggling . Help to Buy was launched by the government in the 2013 Budget to support £113billion worth of mortgages in England. You will only need a deposit of at least 5 per cent on properties worth up to £600,000. The Help to Buy scheme has two parts. The first, which is already live, provides a 20 per cent initially-interest free equity loan from the government, topped up with a 5 per cent deposit from the borrower so you could put down 25 per cent towards a mortgage. This is the bit that is running now and relates to NewBuy. The second part, launching in January 2014, and running for three years, will provide an indemnity on up to 15 per cent of a mortgage, giving banks and building societies more confidence to lend to those with a small deposit. by also indicating . that he has private ‘red lines’ that would prompt him to walk out of the . Cabinet. Row: Chief . Secretary to the Treasury Danny Alexander defended the Help to Buy scheme from criticism from  Vince Cable that it could fuel a new property bubble . Mr Cable has raised concerns about the second part of the scheme, and has proposed it being limited to regions outside London. But today Chief Secretary to the Treasury Danny Alexander rebuffed the concerns. ‘I don’t see any sign of a housing bubble - far from it, at the moment,’ he said. ‘The problem we have at the moment is twofold - one is we’re not building enough houses as a country, we want to see more construction activity as part of that economic recovery. ‘And secondly that there are vast numbers now of young families who have a steady job who can afford the monthly repayments on a mortgage but simply don’t have the resources to make a big deposit that banks now require. ‘I think it’s a good role for the Government to step in with a guarantee to help those people be able to get started - fulfil their aspiration to own a home. ‘But of course there will be safeguards in place: the scheme is time-limited for three years, and the Bank of England will have the chance to have a say if any government in future wants to continue it. But I think for the circumstances we have now, it’s the right thing to be doing.’
UK price rises fuelled by new boom in London and the South East .
But regions see only modest increases or falls in some areas .
House Price Index in England now higher than January 2008 peak .
First time buyers paying 4% more, compared to 3% rise for existing owners .
Experts called for mortgage costs to rise in areas where prices rise by 5% .
By . Matt Chorley, Mailonline Political Editor . PUBLISHED: . 06:26 EST, 17 September 2013 . | . UPDATED: . 07:02 EST, 17 September 2013 . The huge divide in Britain’s house price boom was revealed today, with only London leaving the regions far behind. The capital saw rises of almost 10 per cent in July, but prices fell in Scotland, Wales and the north of England. To add to the pain, house prices are rising faster for first-time buyers than for those who already own a home. Ministers played down talk of a new ‘housing bubble’ as experts warned the recovery was far below historic trends. Average house prices rose by almost 10 per cent in London in the year to July, but fell in Wales, Scotland and northern England . Struggle: House prices for first-time buyers are rising faster than those who already own a home . The latest House Price Index showed values in England have now exceeded the peak in January 2008. But it is almost entirely fuelled by a sharp rise in prices in London and the South East. The Office for National Statistics said that UK house prices in July were 3.3 per cent higher than in 2012, up from a 3.1 per cent rise in June. But when London and the South East are removed, prices are only up 0.8 per cent. Last week, the Royal Institution of Chartered Surveyors (Rics) suggested that a 5 per cent cap should be placed on annual house price growth to stop any future house price bubble and borrowers taking on too much debt for fear of missing out on a boom. ‘House price growth remains stable across most of the UK, although prices in London are increasing faster than the UK average,’ the ONS said. ‘The year-on-year increase reflected growth of 3.7 per cent in England and 1.8 per cent in Northern Ireland, offset by falls of 2 per cent in Scotland and 0.7 per cent in Wales.’ In July prices paid by first-time buyers were 4 per cent higher than a year earlier. By comparison for existing owners prices were only 3 per cent up. Chancellor George Osborne has announced plans for the government to guarantee 95 per cent mortgages under the Help to Buy scheme. But Business Secretary Vince Cable has warned the plans risk fuelling a new housing boom in areas where property prices are already soaring while pricing first-time buyers out of the market. London's house prices are now double those in many areas, and rising faster . The House Price Index in England is now higher than the peak in January 2008, but other parts of the UK are still struggling . Help to Buy was launched by the government in the 2013 Budget to support £113billion worth of mortgages in England. You will only need a deposit of at least 5 per cent on properties worth up to £600,000. The Help to Buy scheme has two parts. The first, which is already live, provides a 20 per cent initially-interest free equity loan from the government, topped up with a 5 per cent deposit from the borrower so you could put down 25 per cent towards a mortgage. This is the bit that is running now and relates to NewBuy. The second part, launching in January 2014, and running for three years, will provide an indemnity on up to 15 per cent of a mortgage, giving banks and building societies more confidence to lend to those with a small deposit. by also indicating . that he has private ‘red lines’ that would prompt him to walk out of the . Cabinet. Row: Chief . Secretary to the Treasury Danny Alexander defended the Help to Buy scheme from criticism from  Vince Cable that it could fuel a new property bubble . Mr Cable has raised concerns about the second part of the scheme, and has proposed it being limited to regions outside London. But today Chief Secretary to the Treasury Danny Alexander rebuffed the concerns. ‘I don’t see any sign of a housing bubble - far from it, at the moment,’ he said. ‘The problem we have at the moment is twofold - one is we’re not building enough houses as a country, we want to see more construction activity as part of that economic recovery. ‘And secondly that there are vast numbers now of young families who have a steady job who can afford the monthly repayments on a mortgage but simply don’t have the resources to make a big deposit that banks now require. ‘I think it’s a good role for the Government to step in with a guarantee to help those people be able to get started - fulfil their aspiration to own a home. ‘But of course there will be safeguards in place: the scheme is time-limited for three years, and the Bank of England will have the chance to have a say if any government in future wants to continue it. But I think for the circumstances we have now, it’s the right thing to be doing.’
the peak in January 2008. But it is almost entirely fuelled by a sharp rise in prices in London and the South East. The Office for existing owners prices were only 3 per cent up. fuelling a new housing boom in areas where and rising faster . The House Price Index in England is now higher than the peak in January