Yahoo Finance Has Covid killed the London property market? Londoners spend record sums on homes outside the capital
Londoners spent £54.9 billion on homes outside the capital in 2021 — a record amount as the pandemic precipitated a lifestyle change already underway thanks to high house prices.
The figure spent by London leavers was about the same as the total amount lent to first-time buyers across the UK in 2020, according to research from Hamptons. This can partly be attributed to a rise in the average purchase price from £450,460 in 2020 to £487,000 in 2021.
The estate agent found it was also due to a 62 per cent rise in the number of homes bought by London leavers, up to 112,780 – the highest number since 2007.
Aneisha Beveridge, head of research at Hamptons, said: “2021 is likely to mark the largest outmigration from London for at least a generation.
“Over the last 20 years, more homeowners have bought outside the capital than those who own in London today. City leavers have changed the geography of not only the commuter belt, but smaller towns and cities across Southern England. And this has become increasingly entrenched in a Covid world.
“The rise of flexible working coupled with affordability barriers have meant that a record 40 per cent of first-time buyers now leave the capital to buy their first home. The capital’s loss is the home counties gain with these buyers prepared to move 24 per cent further than before the pandemic began, taking their wealth and experience with them.
Who are the London leavers?
A quarter of people buying homes outside the capital this year were first-time buyers, the highest share of the market since records began. More than a third (38 per cent) of London-based first-time buyers also opted to buy outside the capital this year.
Londoners selling a home to move out of the capital accounted for the majority (57 per cent) of leavers.
Interestingly, whereas in 2019 and 2020 buyers left the capital to trade up, the average 2021 London leaver spent less on their new home in the country, selling in London for £526,000 and buying outside for £507,000. Overall London leavers made £1.2 billion on their home sales this year.
This could in part be because more movers are leaving the more expensive inner boroughs than ever before, accounting for a record 40 per cent of Londoners moving out of the capital.
The research also showed London leavers got more space for their money, with 43 per cent getting at least one extra bedroom.
Where are Londoners moving to?
Working from home means London leavers are buying further from the capital than previously, adding 23 per cent, or 6.4 miles, to their commute.
That said, 76 per cent of London buyers bought in the South of England.
The five most popular destinations for Londoners trading in a home in the capital for one outside were: Dartford, Wokingham, Epping Forest, Tandridge, and Runnymede.
The most popular areas for London-based first-time buyers were St Albans, Elmbridge, Dartford, Reigate and Bansted, and Thurrock.
London property forecast
Hamptons said that although the future progress of the pandemic remains uncertain, it expects outmigration numbers to remain above pre-pandemic numbers for the next few years.
Ms Beveridge said: “It seems likely that hybrid remote working is set to continue in some form, which will keep outmigration numbers above pre-pandemic norms. However, after this year’s frenzy, we expect the numbers to fall back a little, particularly as house prices outside the capital are set to continue outperforming London over the next few years.
“We expect to see the number of London purchases outside the capital average around 85k in both 2022 and 2023, around 10k more than during the five years leading up to the pandemic.”
However, it is not all gloom for the capital. Separate research from Knight Frank identified a turning point in November 2021, when the number of offers accepted in London reached a 10-year high.
The estate agent said new demand is rising faster in London than anywhere else in the UK, with sales up 116 per cent year-on-year in prime central London and 25 per cent in prime outer London.
In the same month, 22 per cent of all offers accepted in the UK were related to a move into London from outside the capital. This is the highest figure since before the pandemic hit the UK. The majority of these buyers were looking for a pied-a-terre in the capital rather than a permanent base.
