London property
The rapidly rising price of London housing is tempting some homeowners to cash in and move out of the city, driving up property values around the English capital Reuters

London's booming housing market is spilling out to the countryside areas surrounding the sprawling city as homeowners cash in on spiralling property prices.

Estate agency Knight Frank said the Home Counties "hotspots" in commutable distance of London had seen a sudden acceleration in prime residential property prices.

Prices of prime property in Winchester and Cobham rose by 2.6% in the three months to June, said Knight Frank, while prices in Virginia Water were 2.5% higher. Prime country house prices rose by 5.2% on average over the year to June 2014.

The prime property market, which Knight Frank defines as the best quality and most expensive housing, had been subdued in the aftermath of the financial crisis.

But now there is a strong economic recovery in the UK, which the Bank of England predicts will see 3% GDP growth for 2014.

And the Office for National Statistics (ONS) said the average price of a London home soared 18.7% to £485,000 in the year to April 2014.

This is tempting those already on the property ladder to cash in on the capital gain and buy property outside of London, where they can get more for their money.

"The ripples have not reached the far flung counties which are, as a general rule, more than two hours from London, unless the property is exceptional," said Rupert Sweeting, head of Knight Frank Country.

"As ever those houses that are near perfect are attracting strong interest and this year we have seen competitive bidding return in more sales than for a couple of years.

"One note caution is that pricing strategy is even more vital. Where vendors take agent's 'down to earth' guide pricing, they are being rewarded. If they are overambitious, the house will sit around for some time."

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