The average price for properties bought by first-time buyers has jumped more than 11 per cent.
According to the latest figures from the Office for National Statistics for the period between May 2013 and May 2014, first-time buyers are now paying an average of £202,00.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "In some ways it's harder than ever to take that first step. However, lenders have stepped up to the plate with more higher loan-to-value products available now than four or five years ago, with family-assisted schemes and offset products, as well as government schemes such as Help to Buy. The important thing is that buyers must be able to afford the mortgage now, as well as in the future."
The report showed that overall UK house prices rose by 10.5 per cent over the same period, with house price annual inflation of 11 per cent in England, 6.5 per cent in Wales, 3.6 per cent in Scotland and -0.7 per cent in Northern Ireland.
House price growth in England was again skewed by a record annual in London (20.1 per cent) as well as increases in the South East (9.6 per cent) and the East (8.6 per cent). If London and the South East are taken out of the figures, the UK rise is 6.4 per cent.
Alexander Gosling, managing director, online estate agents Housesimple.co.uk, said that the London property market has moved 'from the hot to the hyper'.
"Talk of price rises in the capital going off the boil is clearly premature, even if the month-on-month increases have moved from the giant leaps to mere big jumps," he said. "Supply is strong as sellers decide that now is the time to cash in, and, despite tougher lending conditions, demand is still robust. Despite the strong Pound, international buyers also continue to view the capital's property as a secure long term investment.
"There is a greater sense of sanity elsewhere in the country, with sustained rates of growth now spreading even to the areas worst affected by the slump."
"It is crazy that ordinary working people are having to pay so much for something as fundamental in life as a home," said Duncan Stott, director of PricedOut, the campaign for affordable house prices. "With over £200,000 needed to secure a first home, young people will now be saying ‘enough is enough’. We need urgent action to bring an end to rising house prices."
Campbell Robb, chief executive of Shelter, said the figures showed that house prices are 'spinning out of control'.
"They are putting a stable home even further out of reach for ordinary families," he said. "Instead, scores of people are either stuck in their childhood bedrooms or forced to bring up children in unstable and expensive rented homes, however hard they work or save. With interest rates at historic lows, it is worrying that taking on huge mortgages is becoming a tempting option, and something that could have disastrous repercussions in the future."
Rory Penn, partner of prime London property agency VanHan, said that London’s super prime residential market had 'calmed down' and that 'the excessive year-on-year growth has cooled'.
"But contrary to popular belief, there is still demand from both domestic buyers and a seemingly infinite range of overseas homeowners and investors," he said. "With many buyers priced out of super prime areas, focus has switched to emerging residential areas such as Covent Garden, which is now drawing the glitterati from Mayfair."
Baroness Jo Valentine, chief executive of London First, said the record prices rises were not surprising as London’s population was growing much faster than its housing stock.
"London is suffering from a desperate lack of supply," she said. "We need to be building around 50,000 new homes a year in the capital and we are building less than half of that.
"Across London there are empty sites and redundant buildings owned by the public sector that could be much better used for housing. But there is no body dedicated to actually identifying where all this land is, so actually getting round to selling it happens at a glacial pace. We need to give the Mayor the power to create a 21st Century Domesday Book for London so we know where this land is."