Fears of an affordability crisis are likely to grow as new figures show property prices increasing at twice the pace of earnings.

Prices rose 5.5% over the last year, more than double annual salary growth of just 2.1%.

The average house price in England and Wales leapt by nearly £700 in January to break the £290,000 barrier.

Bournemouth saw the biggest monthly boost of 2.9%, equivalent to an average price hike of £7,371, driven by more technology jobs in the city.

Strongest sales surge found in the North West, up 8.8% year-on-year as buyers seek more property for their money

Adrian Gill, director of Reeds Rains and Your Move estate agents, which produced the figures, said existing homeowners have seen a positive start to 2016. 

“While the 0.2% monthly rise may seem small, we’ve now broken through the £290,000 barrier in average home values across England and Wales.”

Gill said average prices crossed the £280,000 mark last June. “But we have to go back to August 2014 for the crossing of the £270,000 threshold. We’re now passing these milestones in quicker and quicker succession, as prices pick up pace.”

This is making life tougher for those looking to get a foothold on the property ladder as earnings fail to keep pace.

Gill said: “However, aspiring buyers now have much more support with the launch of the Help to Buy ISA in December and the new Starter Homes scheme this year.

“But in the long-term there has to be a huge breakthrough in housebuilding if we’re going meet the growing demand for homes and keep house price growth sensible.”