Savvy house hunters save hundreds of thousands by choosing the postcode next door

"For many of us it’s not worth paying thousands of pounds more just to say we live in W4 not W3"

The online estate agent looked at average property prices in 20 of the most sought-after postcodes in the capital – such as SW4, NW1 and N1 - and average property prices in neighbouring postcodes that might not have the same wow factor.

The research revealed that property prices are on average 37.6% lower in adjacent postcodes where buyers aren’t paying a ‘postcode premium’ for the privilege. HouseSimple also found that for first-time buyers, flats are on average 28.9% cheaper in these postcodes.

For example, SW4, which covers Clapham, is popular with young professionals, and local property prices have boomed. The average price of a flat in SW4 is currently £873,498. But if you were to hop over the postcode border into SW9, and look in areas such as Stockwell, the average price of a flat is £599,302, more than £270,000 cheaper.

Similarly, N1 is a popular area with 20 and 30-something first time buyers. However, with the average price of a one bed flat around £830,672, only buyers with a sizeable deposit from the bank of mum and dad are likely to be able to afford to live there. Instead consider E2 next door, where the average price of a flat is a more affordable £526,092 – that’s more than £300,000 or 36.7% cheaper.

Alex Gosling, CEO of online estate agents HouseSimple.com, comments: “There will always be buyers who are happy to pay a premium for the privilege of living in one of London’s most in demand postcodes. But for many of us it’s not worth paying thousands of pounds more just to say we live in W4 not W3.

Instead, with a little bit of research, you could find a similar property, both in style and square footage, just over the border of a sought-after postcode, that is well within your budget. That way you can still enjoy the benefits of living close to your preferred area, but you’re paying a fraction of the price for a property

Also, you are likely to benefit from the uplift in property prices, that a less sought-after area will enjoy, as buyers who can’t afford to purchase in the most popular postcodes, look at surrounding areas for value.”