Henley is the costliest town

It is a historic market town, as famous for its annual royal regatta as its quintessential English charm.

With a picturesque setting, beautiful houses and easy access to London, in recent years Henley-on-Thames has become one of the most sought-after locations in the South-East.

And now it is official - the 12th-century town, with a population of 11,000, is the most exclusive in the country.

House prices in Henley have more than doubled since 1997 to become the highest outside central London, with the average home costing £411,794.

Any new residents will have to spend £30,000 more than they would to move into nearest rival Richmond and seven times more than in Lochgelly, Fife, the cheapest location.

The South-East still dominates the top of the table, published by Halifax. Weybridge is the third most expensive location in the country, with an average house price of £376,427, followed by Ascot and Teddington.

Henley owes a lot to its setting on the Thames, its proximity to the Chilterns and its stunning architecture, with 300 listed buildings. It also has good transport links: 35 miles from London, it is minutes from the M40 and M4, and 45 minutes by train from Paddington.

However, the town's success in the housing market is pricing out much of Henley's indigenous population, which once included many farm labourers and craftsmen. It is also leading to a shortage of low-paid workers, affecting services like the hospital, which is under threat of closure though a lack of staff. Boris Johnson, Conservative MP for Henley, said: "It is the pearl of the Thames. But there is a major problem being caused by the ambient prosperity. We need to get affordable housing built without spoiling the town."