House prices in the South East of England have recovered strongly since the economic downturn with homes in Surrey performing the best within the region, a new report from Savills shows.
It reveals that the market for new build property in Surrey is very positive, signalled by certain developments in Guildford achieving over £500 per square foot.
Across the county various sub-markets for new homes can be found, but in general the demand for property is such that in many areas of the county the market is more comparable to prime areas of West and South West London, including neighbouring boroughs such as Richmond and Kingston, than the rest of the South East.
In Woking, flats are the dominant new build type, and prices are more affordable than in Elmbridge or in Guildford. The average sale price of a new property was £264,000 in the year to March 2014 according to Land Registry data.
In Guildford development ranges from town centre flats and family housing to large detached houses in the surrounding villages. Across all new property types the average sale price over the same period in Guildford was £474,000.
To the north of the county is the affluent district of Elmbridge, where the most desirable new properties in locations such as Esher and St. George’s Hill can command values around £800 per square foot. The average value of a new detached house in Elmbridge was £1.73 million in the year to March 2014.
The report also indicates that smaller, niche developments have proved popular and can command premiums over equivalent second hand homes where they are able to offer something different to the existing stock.
For example, Mulberry Mews is a development of nine terraced houses in central Reigate, and has achieved values of around £500 per square foot according to Savills data. This compares very favourably with second hand values in the area, which average around £300 per square foot according to Hometrack. Low levels of stock in the general second hand market, particularly of high quality period properties, have reinforced the interest in new build developments.
‘Demand for new homes in the area comes from a range of sources. Older, equity rich downsizers are attracted by the prospect of lower maintenance and running costs, along with the peace of mind that comes from new, high spec appliances and a builder guarantee,’ said Nick Gregori, Savills research analyst.
‘This group are likely to have lived locally in a semi-rural location, and once they are retired or their children have grown up and left home a more urban environment becomes appealing. The centres of Guildford, Woking, Reigate and Farnham all have wide ranges of amenities such as restaurants and cafes, bars, theatres and shops,’ he explained.
‘Family buyers traditionally consisted of people moving up the ladder locally, but recently this has been supplemented by buyers moving out from London, who now make up a key component of the demand. Not only is a typical three bedroom family home in…