Overall the average house price is now £274,302 – but only £185,496 omitting London and the South East.
This represents the biggest price disparity since 1995 due to cooling house prices in regions.
David Newnes, director of Reeds Rains and Your Move estate agents, said: “A game of two halves is being played out in the UK property market.
“In terms of average house price growth, a gap has developed between the South East corner and the rest of the country.
“If we exclude the key players of London and the South East from the game, a whole different playing field is revealed.
House prices across the remaining parts of England and Wales have only increased 4.3% in the past year, or less than half of the overall measure of 10.7% when we include London and the South East.
Newnes said: “In absolute terms the difference would seem to add £88,806 to the average price tag for a home across England and Wales – the highest absolute difference since 1995.
“This obscures cooler prices in much of the country. Further afield, it is critical that support mechanisms like Help to Buy aren’t dismantled.
“In July, house price growth slowed across all regions except for London, the South East and East Anglia.
“While these three regions continue to set new house price highs, the rest of the country is nowhere near these levels of growth.
“Compared to the nadir of 2008-2012, activity in the housing market has improved, but is not completely out of the woods yet, and still needs to recapture some of the vitality of its pre-recession health.
“There is also much more to be said beyond the headlines for London. The annual rate of growth in London house prices is the fastest witnessed since 2000.
“Most recently we’re seeing asking prices in the capital start to be reined in, which will apply the brakes on annual house price inflation as the market steadies.”