Guaranteed Rent Scheme | Swap your London home for a country pad
The gaping price gap between the capital and the countryside puts Londoners with itchy feet in a strong position, says Caroline McGhie.
Timing is all in the property market. Get it wrong and you can lose money. Get it right and the benefits can be huge. Martin and Miranda Gillott are putting their two-bedroom end-of-terrace house in Battersea on the market in the quiet weeks before Christmas because they have seen something they would love to buy in West Sussex. They want to live in the country and have a dog.
They are also hitting the market at an optimum moment. “We have been keeping an eye on the market in Sussex and prices have been static or dropping slightly,†says Miranda. And their estate agent tells them prices in their streets close to Clapham Junction have risen by 30 per cent in two years. The Gillotts know this is right because they thought about selling two years ago. “It was a buyer’s market then and everyone thought prices would drop. But now things have changed,†says Miranda. John D Wood (020 7228 0174) is asking £795,000.
Many others are taking advantage of the same trend. “We are now seeing the greatest differential ever between prices in prime London and the countryside. So more vendors are now looking at moving out,†says Barclay Macfarlane of Strutt & Parker, who has seen house prices rise in Fulham by 30 per cent to 70 per cent in the same period. This is in spite of the recession.
Savills calculates that prime central London values have risen by 22 per cent since 2007, fuelled by international money pouring into the capital over the same period. “It became clear last year that the residential property market had polarised between prime London and the rest. This distinction has become increasingly entrenched,†says Yolande Barnes, director of Savills world research.
House prices in the most popular residential areas, the nappy valleys of the metropolis, have also continued to swell, as middle-class families moved from the centre and made way for international buyers. Barnes predicts this phenomenal growth will stall in 2013 but then rise by 3.5 per cent in 2014 and by just over 22 per cent by 2017.
The trickle effect, as people move out, taking property wealth with them, is reaching commuter hot spots but not spreading beyond, according to Savills.
This means that places like Sevenoaks, Guildford and Beaconsfield are much more robust than Nottingham or Swindon. Savills forecasts that the prime inner commuter zone over the next five years will rise by 21 per cent and the outer commuter zone by 19 per cent.
“Although the gap between prime London and prime regional prices has never been wider, buyers have lacked the confidence to exploit it,†says Barnes. “As the economy improves, we expect this will begin to change.â€
Ed Mead at the estate agent Douglas & Gordon has watched the gap grow. “At the upper end, £1.2 million gives you a choice between a four to five-bedroom house in, say, Wandsworth, and a country property with 20 acres in Dorset,†he says. “But look back a year and the house in London would have been £1.1  million while the house in Dorset would have been £1.3  million. This shows how country prices have gone down while London prices have continued to increase.â€
House search agent Adrian Wright, of Private Property Search, says people are beginning to realise that this is a window of opportunity. “More people are thinking about it. The last time there was such a big difference in price was probably 30 years ago. But it will only affect certain parts of the country, the commutable and beautiful parts. The London market is slowing, so people are thinking they have had the bulk of the increase and now is the time to sell.â€