Most leavers are making a permanent move out of the capital
While overall numbers have fallen year-on-year, the rate at which people continue to leave London has remained the same as it was during the peak of the pandemic.
According to data from real estate agent Hamptons, Londoners bought 40,540 properties outside the capital during the first six months of the year, 19% above the 2015 to 2019 pre-pandemic average of 34,140.
Since overall transactions were much lower compared to the high numbers of 2021 - partly driven by the stamp duty holiday - the number of homes bought by Londoners moving out also went down annually by 16,210. Still, Londoners bought 7.9% of all homes sold outside the region in the first half of 2022, the same proportion as last year’s, and up from 6.9% in 2019.
Hamptons said that if this pace continues throughout the year, Londoners are set to buy 88,210 homes outside the capital in 2022. This is equivalent to the total number of homes sold in Yorkshire and the Humber last year (88,506) and 18% more than pre-pandemic years when London purchases outside the capital averaged 74,980 each year between 2015 and 2019.
“It’s becoming increasingly evident that one of the biggest COVID-related housing market trends – moving out of London for the country – could be here to stay,” Aneisha Beveridge, head of research at Hamptons, said. “Despite more people returning to London offices this year, the rate at which households have upped-sticks and headed out of town has continued apace.
Almost eight in 10 (78%) London leavers are heading out of the capital to set up a home, rather than purchasing a buy-to-let or a second home. Those making a permanent move out of the capital in the first six months of 2022 bought 31,740 homes, 16% above the pre-pandemic average of 27,400.
Hamptons pointed out that affordability barriers and flexible working patterns have meant that a record 28% of Londoners buying outside the capital this year were purchasing their first home, up from 22% in 2019 and 13% a decade ago.
On average, these buyers spent £383,070 on their first home, equating to a total of £4.3 billion spent in the first half of 2022. This is compared to an average price of £526,600 for a first-time buyer purchasing in London.
“While last year, families relocating to gain more space accounted for nearly three in five Londoners buying outside the capital, this year, the figures have been driven by first-time buyers, many of whom were renting in the capital,” Beveridge noted.
The Hamptons report also found that while the average Londoner bought a property 35.1 miles from where they lived, first-time buyers stayed a little closer to the city. On average, first-time buyers moved 23.7 miles, 2.2 miles further than in 2019 as strong house price growth, flexible working, and the desire for space pushed them further out.
“Strong house price growth outside of London over the last year has meant that buyers have had to move even further outside the M25. The distance London leavers move is likely to continue rising until at least 2024 as house price growth in the capital continues to lag behind the rest of the country,” Beveridge added.
“While many Londoners have traded the city lights for a country abode, we’ve also seen a rise in the number of people moving into the capital this year - both tenants and buyers, from the UK and abroad. So far this year, 13.3% of people buying a home in London came from the regions, the second highest figure on record. A sign that perhaps London hasn’t quite lost its sparkle!”