According to one estate agent, higher mortgage rates mean house moves from London are driven by need rather than want, and people are looking for smaller properties in cheaper areas.
Londoners accounted for 7.7% of homebuyers outside of the UK capital in the first half of this year, Hamptons estimates, beating the 6.9% average for the 2015-2019 period.
However, that is slightly below the 7.9% recorded in both 2021 and 2022 – a time when people were more likely to adapt to new lifestyles, such as working from home.
The calculations were based on analysis of data from the Countrywide real estate network, of which Hamptons is a part.
Pressure on affordability has meant the average ‘London leaver’ has spent £429,800 on their new home this year, £63,735 less than those who left the city in 2022.
There is also evidence that a larger proportion of London expatriates are buying smaller properties: 37% are buying a one or two bedroom house, up from a third (33%) last year.
Increasingly this year, outflow from London has been driven by need rather than scarcity, as higher mortgage rates squeeze buyers’ budgets and push them to look for smaller homes in more affordable areas
Hamptons estimates that three in ten (30%) Londoners buying property outside the capital this year will be first-time buyers, up from 27% last year.
The average first-time buyer leaving London traveled 25.0 miles from home, up from 23.0 miles last year and 14.3 miles in 2013.
Aneisha Beveridge, Head of Research at Hamptons, said: “Higher mortgage rates have halted the unwinding of what is arguably the biggest Covid-driven property market trend – London emigration.
“Rather, outflow from London this year has increasingly been driven by need rather than scarcity, as higher mortgage rates squeeze buyers’ budgets and push them to look for smaller homes in more affordable areas.
Swapping the town for a cheaper area off the M25 might be the only option for those who need to scale up
“Most of these movers are still keen to maintain a strong connection with the capital. This has boosted the value of smaller homes in some of the cheaper cities just an hour from London.
“Looking ahead, the likelihood of mortgage rates staying high longer could increase the pace of emigration from London.
“We are also reaching the point where a large number of households who bought a home between 2014 and 2016 at the peak of the London market may be planning to move in the next few years.
“And with property prices in parts of the capital now lower than when they were bought, swapping the city for a cheaper area outside the M25 could be the only option for those in need of expansion.”
https://www.standard.co.uk/business/money/house-moves-out-of-london-have-increasingly-been-driven-by-need-over-want-b1098980.html House moves from London were ‘increasingly driven by need rather than scarcity’