House prices to soar in the suburbs as buyers are priced out of London
Wed 06 Nov 2013
House prices in London suburbs and commuter towns are set to soar as thousands more buyers are unable to
afford the cost of homes in the city centre, experts predicted today.
More buyers who once dreamed of a house in one of the capitals affluent central boroughs are being forced to
look further afield and commute to work.
Property experts Knight Frank tomorrow publishes its Prime London Index which is expected to show price growth
in the centre has dipped below the annual national rate - which was put at 6.9?per cent by the Halifax today. Liam
Bailey, Knight Franks global head of research, said: Prime central London has outperformed the UK market
significantly since 2009, and we are now seeing the impact of the ripple effect as price growth moves away from
the central boroughs and out into the London suburbs and South-East.
Property advisers Savills are also forecasting the biggest rises - of 26.3 per cent on average? - over the next five
years will be in prime suburbs such as Esher, Cobham and Weybridge in Surrey, Rickmansworth in
Hertfordshire and Lockswood in Bromley.
Commuter towns close to London including Guildford and Sevenoaks are predicted to see the next highest
increases of 25.1 per cent, more than central London of 23.1 per cent over five years.
The gap between prime London and surrounding prime regional markets has grown so wide there is now a
compelling case to move out, said Lucian Cook, head of residential research at Savills.
The exorbitant cost of central London properties, fuelled by foreign investors snapping up thousands of homes,
was laid bare by the average price for a one-bedroom flat smashing the 500,000 mark in prime London,
according to estate agent Marsh & Parsons. It had jumped by more than 60,000 in the past year, or 14 per cent,
to 502,139 in the area which includes Chelsea, Kensington, Notting Hill, Holland Park, Pimlico, Clapham,
Balham, Battersea, Barnes, Pimlico, Little Venice and Brook Green.
Peter Rollings, chief executive of Marsh & Parsons, said: Spurred on by the rapidly improved availability of
mortgages and low interest rates, first-time buyers are flooding the market in competition for the best properties
in this price bracket.
But the huge increases have raised fears of a new house price bubble, particularly in London.
Across the country, house prices surged by 6.9 per cent annually in October as they continue to rise at their
fastest rate in more than three years, Halifax said. A 0.7 per cent month-on-month increase took prices to
171,991 on average, marking the ninth monthly rise in a row as the new phase of the Governmentss flagship
Help-to-Buy scheme was