House prices: Property in the suburbs will rise faster than London
So where are prices going to rise the most, and why?
Slowing LondonSavills is predicting that sales of expensive properties in central London are likely to slow in the run up to the election in 2015. This is partly a fear of a potential mansion tax - in an area where increasing numbers of properties are pushing into multi-million pound territory.
There are also concerns over suggestions of a tax on property held by people based overseas. The huge numbers of central London properties owned by the international jet set are under threat from a tax hit that could put off potential future buyers.
The estate agent predicts that after rising 3% next year, prices in central London will actually fall 1% in 2015 while buyers wait to hear who will be in power - and what approach they intend to take to very expensive property. Whether prices then rebound, or face modest falls and slower recovery, depends on who is in power and what policies they adopt.
SuburbsBy contrast, demand for property in the suburbs is primarily driven by demand from UK buyers, and as the properties are largely less expensive, fewer are threatened by any possible mansion tax. As a result, prices are predicted to rise 6% in 2014, and 26% over the whole period.
Savills says that in the autumn it saw the first signs of growth in the suburbs outpacing the capital. Sophie Chick, residential market analyst at Savills says: "The gap between prime central London and its prime commuter markets has probably peaked and wealth has finally begun to flow out of the capital. We anticipate that 2014 will be the year when the value gap between London and the lead suburbs and prime inner commuter belt finally begins to narrow. We expect 2014 to be the year of the super suburbs."
These suburbs are likely to include places such as Kingston-Upon-Thames, Weybridge, Rickmansworth and Harrow.
The further you go from London, the less you are expected to see prices rise. At the moment, prices further afield remain up to 25% below the peak, and the 7% stamp duty threshold has seen a real ceiling develop at £2 million. It means that Savills is predicting a 25% rise in what it calls the 'inner commute' and includes towns like Guildford and 23% increase in the 'wider commute', which stretches to places like Basingstoke.
For buyers, it seems that the next five years is likely to price even more people out of zones one and two, and push thousands more people onto trains bound for the home counties - and beyond. The days when more than half your working day is spent on a train may not be far off.