Surrey property market benefiting from London ripple effect

Aided by an influx of overseas property investors, demand for prime London residences has generally outstripped supply since early 2009, helping to push property prices and rents significantly higher.

Estate agents across some of the capital's most desirable areas, from Kensington estate agents to Fulham estate agents, generally agree that international buyers have dominated the property sales in London, attracted by the cheap sterling and low interest rates.

Take Belgravia as an example. Whether looking for a property for sale in Belgravia or a property to rent in Belgravia, Belgravia estate agents report that housing supply is extremely restricted due to very high demand to live and invest in properties in the area, particularly from overseas nationals.

Stuart Bailey, head of Knight Frank in Belgravia, told the press recently that his firm have successfully sold no fewer than 15 homes in Belgravia for over £10 million apiece in the past 13 months.

But while foreign purchasers are vying for some of the best 'super-prime' homes in London, there are growing signs that residential property price growth is rippling out to wider London and the south east, including Sussex.

Wandsworth estate agents report that more people are looking at property for sale in Wandsworth as it presents a cheaper alternative to prime central London, not to mention an escape from the hustle and bustle of the heart of the capital.

Located in south London, Wandsworth is located less than five miles from Charing Cross making it easily commutable into central London. Consequently, more and more people are actively buying properties in Wandsworth, which in turn means that there are fewer homes on the market, pushing up property prices in the process.

Tim Harvey, managing director of expatriate mortgage specialist Offshoreonline.org said: "We have seen evidence of good quality houses selling in Wandsworth within two weeks of being listed."

Further afield, property markets in pockets of Surrey are also feeling the benefits from the property boom in London and the rise in foreigners buying homes in the UK.

A growing number of rich purchasers from Russia, Kazakhstan, the United Arab Emirates and the United States are buying properties in this part of the country.

Any homeowner with a property for sale in Esher, for example, can often expect to receive multiple viewings and possibly even a few offers within a short time of releasing their home onto the sales market, due to a scarcity of properties in the area.

John D Wood & Co. reports that there are multiple families for every available property in Esher.

The situation is similar as far as property for sale in Weybridge is concerned. This part of Surrey attracts a wide range of rich and famous buyers.

Property markets in other parts of Surrey are also prospering from greater demand among purchasers.

Homes located in key areas, such as Grayshott and Haslemere, south of the Hindhead tunnel in Surrey which opened in July 2011, have appreciated at a fast pace in anticipation of the project, and some local estate agents estimate that they could outperform the general market by increasing by as much as five per cent over the next year.

Despite wider concerns about the UK economy, prospects for property markets in parts of London and Surrey appear to be blooming if you know where to look.

Ray Withers of Property Frontiers said: "Over the past year we have seen a huge increase in demand for UK property, especially buy-to-let, so we are not surprised to see this level of interest continue into 2012 and whilst we remain in uncertain economic times, security and capital growth will prevail over riskier, often higher yielding opportunities."

Oxford property market to benefit from new transport links

New rail and road schemes are often important factors for people when looking for a new place to live, and can even bolster home prices in some regions of the country.

George Osborne announced 35 new transport initiatives in the Chancellor's Autumn Statement in November which could make a difference to the housing market and even boost local residential property prices in some parts of the country.

The Government desperately needs a positive strategy for growth and making infrastructure the centrepiece of the Autumn Statement is a good start," said a spokesperson for the Royal Institute of Chartered Surveyors. "Upgrading Britain's creaking infrastructure will deliver much needed work to members and the benefits will be felt throughout the economy."

The opening of the Hindhead tunnel in Surrey in July 2011, for example, has had enormous benefit for property prices in key areas south of the tunnel, such as Grayshott and Haslemere, which have seen property prices increase significantly, according to estate agents Knight Frank.

"New or improved transport infrastructure can make a significant difference to the market, especially if it becomes easier to commute into a nearby city," said Grainne Gilmore of Knight Frank. "Ease of travel is high on any list of priorities for new buyers."

Surrey has long been a popular part of England in which to live in. Cobham estate agents, for example, have been kept busy in recent months due to high demand for property for sale in Cobham as well as property to rent in Cobham.

Elsewhere in the country, Oxford estate agents John D Wood & Co. anticipate a major increase in demand for property for sale in Oxford thanks to the Autumn Statement.

The Government announced that it is backing 'East West Rail' between Oxford and Bedford as part of the National Infrastructure Plan. The new line, which aims to be open by 2017, will provide a fast link from Oxford to Bicester, Leighton Buzzard, Milton Keynes and Bedford, by-passing London and linking the West of England with the Midlands and the North.

As well as potentially boosting property sales in Oxford, the new scheme is expected to also drive greater demand for property to rent in Oxford.

A spokesperson for John D Wood & Co. said: "This announcement is excellent news for the villages in North Oxfordshire and Buckinghamshire, bringing a fast link from the academic and research centres of Oxford to the growing towns of Bicester and Milton Keynes.

"Chiltern Railways is also aiming to operate a new 100mph service between London Marylebone and Birmingham, stopping at Bicester and linking up with Oxford. This will provide a significant boost for commuters in Oxfordshire."

In London, Battersea estate agents are also delighted with the Chancellor's infrastructure spending, particularly the decision to extend the Northern tube line to Nine Elms and Battersea.

Peter Damesick, EMEA chief economist at property adviser CBRE, commented: "A specific benefit for London is the extension of the Northern line to Nine Elms and Battersea, using Tax Increment Financing."

Given the perilous state of public finances and the economic maelstrom at home and abroad, the Chancellor's Autumn Statement went about as far as the property industry could have reasonably hoped.

Housing shortage in South London

With residential construction levels at a historical low, there is a well-publicised requirement for more new homes in South London to help cope with a rising population and growing demand for homes to both rent and buy.

Talk to Wimbledon estate agents and they will report that there is nowhere near enough property for sale in Wimbledon to cope with existing demand. Consequently, house builders are falling over themselves to develop more homes in this desirable part of South London.

Construction firm Shanly Homes recently announced plans to launch a new homes scheme in Wimbledon in early 2012 on the site of a former convent.

The development, called St Anne's Mews, will become a private gated development of much-needed family homes, including eight desirable three, four and five bedroom town houses located on The Downs, a popular area of Wimbledon. The development also includes the conversion of a six-bedroom Victorian villa.

Sean Purtill, partner at Ellison's who are marketing the new St Anne's Mews development, said: "There is a strong demand for good quality family homes in Wimbledon and this is an exceptional development which benefits from a great location - three of the eight properties are already reserved, despite the fact that the site hasn't officially launched yet, so we expect there to be a flood of interest when it officially opens early next year."

The fact that properties at St Anne's Mews start from £1.7 million shows just how popular an area Wimbledon is to live in, which in turn is pricing many people out of the market, further illustrating the fact that more homes need to be built locally.

Whether looking at property for sale in Holland Park or property for sale in Kensington, the situation is similar across many other sought-after parts of London.

The shortage of home in desirable parts of the capital means that the high-end of the London property market is defying the wider housing market slowdown, with property prices increasing in some popular parts of the city.

"You have got the macro uncertainty but there's a huge demand for property in London from international buyers and from UK buyers," Berkeley's managing director Rob Perrins said in an interview with Reuters.

A high level of demand for property for sale in Fulham, for example, means that many Fulham estate agents are finding that a mini-boom is occurring locally, mainly due to the lack of homes on the market.

"We're now already beyond the 2007 peak, with prime properties 10 per cent above the top of the market," said Alex Oppenheim of John D Wood & Co. "It’s due to a lack of [housing] supply."

The prospect of capital growth is an attractive proposition for property investors and homeowners looking to one day move up or down the housing ladder. For a lot of people, property has become part of their investment strategy. With saving interest rates at a historic low and private sector pensions in a rather sorry state, many people are now relying on property to fund their retirement.

Caroline Kavanagh of Townends estate agent said: "As other investment options continue to give little in return, property will become an increasingly attractive proposition and a more viable long term investment for many."

The media is likely to paint a gloomy picture for the housing market in 2012. Initial signs are that the property market nationwide will remain somewhat subdued, with the exception of some primary parts of London, where property prices are expected to remain relatively stable or show modest growth.

Canny investors eye up properties in Oxford and Surrey

A shortage of space in some of the UK's most prominent areas and an abundance of cash-rich national and overseas purchasers will continue to drive rents and property prices higher across many parts of the country, including Oxford and Surrey, according to various estimates by property experts.

Surrey has long been a top location to live in. Property buyers often face tough competition for what comes to the market in Surrey, particularly when there is a new property for sale in Esher. High demand generally places upward pressure on property prices, which appeals to property investors looking to capitalise on future capital appreciation.

Esher, located in the borough of Elmbridge in south east England near the River Mole, is a popular place to live, thanks partly because it offers homebuyers the chance to have the practicality of city life with a countryside setting, due to its easy commutable distance to Charing Cross in central London.

As well as excellent transport links, homeowners in Esher also enjoy the local entertainment and shopping facilities. The area, a prosperous part of Surrey, was recently described as "one of the best places on Earth", by local resident and ex-footballer Gary Lineker.

High rental demand for homes in Esher is also appealing for property investors as this is helping to push rents higher.

Estate agents Hamptons International project that high rents in central London will continue to push demand further out to areas like Esher as renters are unable or unwilling to stretch their budgets.

"We are expecting the rental market boom to continue in prime and Greater London, driven by a continued imbalance between supply and demand. For the first time ever, the private rented sector will house more people in the UK than the social rented sector, which will put continued pressure on prices," said Lesley Cairns, head of lettings at Hamptons International.

High demand for property to rent in Oxford, particularly from students wanting to attend the local university, is also attracting more property investors to this vibrant and diverse county.

Rebecca Priestley of leading Oxford estate agents John D Wood & Co. comments: "Here [in Oxford] the excellent transport links to London and to the rest of the South of England, the good range of both private and state schooling, and excellent retail and recreational facilities makes the area highly attractive for those who will be moving their families and businesses here."

In fact, the lack of homes in relation to demand often means that any new property for sale in Oxford is generally treated like gold dust – sought after by a range of buyers, particularly investors looking to tap into the booming student rental market in Oxford.

Research by Paragon Mortgages illustrates the fact that the student housing sector presents landlords with some of the highest rental yields in this country.

Landlords renting properties to students generally achieve the highest rental returns, with an average yield of 7.62 per cent, according to Paragon.

High demand for properties in Oxford, including student housing, has inspired property developer A2Dominion to launch a new student housing scheme in Oxford.

The organisation plans to redevelop Luther Court to create 43 new homes and 19 cluster apartments for students.

A2Dominion, which currently manages over 2,500 homes in Oxford, is preparing a planning application for submission to Oxford City Council, following consultation with residents of Luther Court.

Laurinda Hornblow, A2Dominion's area director (North), said: "This is an exciting redevelopment project which will not only provide high quality new homes, replacing the existing Luther Court scheme which is almost 30 years old, but improve access and privacy for residents. Subject to planning consent, we hope to begin building work in late 2012."

The plans for the redevelopment, which have been designed by Yurky Cross Archtiects, include eight one-bedroom homes and 35 two-bedroom homes, and 19 student cluster flats, providing a total of 76 bedrooms for students.