The lender was commenting on figures from the Land Registry which showed that London experienced the greatest increase in average property prices during the 12 months to February, jumping by 13.5%.

Mark Posniak, Managing Director at Dragonfly Property Finance, said: "With its double-digit price growth over the past year, the unique property microclimate of London and the South East is once again in evidence.

"With the exception of the East of England, the difference between the South East corner of England and all the other regions is as pronounced as ever.

"With the London market where it is, the South East is well positioned for further outperformance in the short to medium-term as buyers shift their focus beyond the capital.

"Property investors, both overseas and domestic, are increasingly looking for capital growth and yield potential outside London.

Rishi Passi, CEO at Oblix Capital, said the market had been driven by the imminent changes in stamp duty.

Rishi said: “Despite a slight monthly dip, these figures show a market that’s continuing a trend of strong annual price inflation as landlords become even more competitive in their attempts to secure properties ahead of the stamp duty change deadline in April.

“Looking ahead, the Bank of England’s announcements this week may go some way in taking the heat out of the market, which combined with tax changes announced last year, may relieve some of the upward pressure on prices in the medium term – encouraging news for many first time buyers who remain priced out of the market.”

Jeremy Leaf, a former Chairman of RICS (Royal Institution of Chartered Surveyors) and north London estate agent, expects an increase in buy-to-let investments which will make it even more difficult for buyers to enter the market.

He said: “The decline in number of property transactions continues to be a worry, with a 6% fall in completions in December compared with the previous year.

“If people aren’t able to move in and out of the market when they want to, there will be an inevitable knock-on effect for the rest of the economy.

“On the ground, we want to see more balance between supply and demand, and while we expect completions to rise in January and February as landlords attempt to beat the stamp duty hike from April, there remains a woeful lack of supply, which will push prices higher.”