BRIGHTON and Hove is being tipped as among the best places for property investment with house prices expected to grow by 40% over the next five years.

Online real estate company Rightmove has predicted house prices in Brighton and Hove will continue to rise as the city sees “knock on” effects from the London market.

Prices in the city are set to surge at a rate faster even than London.

Marc Cox, director of Mishon Mackay, said: “Brighton benefits from being only a 50-minute commute into London which means that price rises in the capital have always had a knock-on effect on prices here.

“In the past year, prices have gone up around 20% and the demand from non-residents means we’re now seeing one-bed flats going for £200,000.

“We recently sold, subject to contract, a three bed terraced house in an area right next to Hove station for nearly £500,000, which 20 years ago would have sold for about £35,000.

“So while the demand is there from buyers, the uncertainty of interest rate rises, the upcoming election and how tough it is to get a mortgage mean that supply is only slightly up on last year and there’s still only around half the stock that we had back in 2006 and 2007.”

In the past ten years house prices in Brighton and Hove have grown by 44%. According to Nationwide, in the last quarter of this year house prices in Brighton and Hove have already grown by 13% - driving the average price in the city to £380,662, which is nearly twice the national average of £188,810.

Andy Garth, ex-president of the Brighton and Hove Estate Agents Association, said: “If you go back historically, Brighton has always been the first choice outside of London in the South East.

“It is just a continual news story, if you cannot buy a house or flat in London for the same expense in Brighton you can buy a very, very nice house.

“Even though it is expensive, it is still cheaper than London and it is very easy to commute up there.

“It is the commuter town for London as it is just two stops and you are there and it’s under an hour.

“There are so many pluses over living in London, an awful lot of people do it as when they get home they have the sea, the downs and everything they require on their doorstep while only being an hour away from Victoria.”

Miles Shipside, director of Rightmove, said the top three locations for growth are Brighton, Southampton and Luton.