Londoners leave capital as affordability challenges impact home purchases

Londoners leave capital as affordability challenges impact home purchases

0:01 AM, 27th December 2023, About 6 months ago 1

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The number of homes bought by Londoners outside the capital fell to their lowest levels in nine years.

According to research by Hamptons, Londoners spent £28.7bn on homes outside the capital this year, 29% or £11.7bn less than in 2022 and £20.1bn down on 2021 when outmigration peaked.

The number of Londoners leaving the capital to move elsewhere in Great Britain dropped back sharply in 2023, following two years of near-record outmigration levels.

Affordability pressures

The fall in Londoners leaving the capital is driven by two factors says Hamptons.

Hamptons says: “Fewer homes were sold nationally, London leavers are buying in smaller numbers too.

“The number of homes bought by Londoners outside the capital fell to 69,190 in 2023, the lowest figure in nine years and down from a peak of 100,980 in 2021.

“Secondly, the reality of higher mortgage rates mean London leavers are also spending less on their new home outside the M25.

“Affordability pressures meant that the average Londoner buying outside the capital spent an average of £415,020 in 2023, £89,990 less than the £505,010 average spend last year.”

Looking further afield

Aneisha Beveridge, head of research at Hamptons, said: “With only around a million homes changing hands across Great Britain this year, fewer Londoners crossed the M25 in 2023.

“However, those that did tended to be downsizers or first-time buyers.  Downsizers, tired of London life, are looking further afield to release cash and clear their remaining mortgage balance.

“Meanwhile higher mortgage rates have reduced first-time buyers’ purchasing power, pushing them to search for more affordable homes further afield.”

She added: “With mortgage rates expected to continue falling in 2024, the affordability picture should improve.

“We expect this to slow the pace of London outmigration somewhat, as younger Londoners can increasingly afford to buy locally.

“Upsizers, who have sat tight in a subdued 2023 market, are likely to come back into the fold as it gets cheaper to borrow, meaning they’re likely to dominate those leaving the capital next year.”

Cost of living pressures

Of the 32,090 households who sold a home in London and bought outside the capital, a record 77% spent less on their new home than they sold their main residence for.

This figure has jumped from 60% in 2022.  On average, movers are spending 39% less on their new home outside of London.

This releasing of equity has meant that a record number are paying cash for their new home outside the capital.  Of the households spending less on their new home in the regions, a record 81% bought without a mortgage, up from just 51% in 2022.

First-time buyers made up a record 30% of Londoners purchasing outside the capital in 2023.  Ten years ago, they accounted for just 12%.  Higher rates have limited their ability to borrow, forcing them to buy in more affordable areas.

Cost-of-living pressures and record-breaking rental growth in the capital have also made it difficult for them to save up.


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Comments

NewYorkie

10:53 AM, 28th December 2023, About 6 months ago

Nothing to do with the fact that London has become a ***thole, then!

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