London has bounced back in style since the pandemic, with this year seeing the highest number of non-Londoners buying in the capital for more than a decade.
So far in 2022, 12.7% of homes sold in London were bought by someone living in another region. This is the highest figure since Hamptons’ records began in 2009 and is up from 10.9% in 2019 and 11.1% last year.
Buyers are typically coming from affluent locations in the London commuter belt where homeowners have sufficient equity to afford to clamber onto the capital’s housing ladder. Surrey locations top the table, with some 5.0% of purchasers coming from Elmbridge, followed by 4.4% from Tandridge and 4.1% from Reigate and Banstead.
But while central London’s rental market is racing away, buyers from outside the capital are sticking to the suburbs - a trend that has become more pronounced since the pandemic.
This year has seen only 18% of non-London buyers opting for central locations, with 82% purchasing in Zones 4-6. This is a reversal of 2019, when 53% of purchasers bought in Zones 1-3, with the remainder opting for Zones 4-6. This pandemic-enhanced trend doesn’t show any sign of abating yet, especially given that outer areas are more affordable.
For the people who are selling up outside London and using the equity to buy in the capital, the price gap between what they are selling and buying has been closing since 2016. This is down to a combination of higher rates of house price growth in the Home Counties and the shift towards outer areas of the capital where properties tend to be cheaper.
Six years ago, 70% of non-Londoners buying in the capital were paying more for their new home than the one they were selling – the average price gap was 40%, or £181,000.
Today, that gap has closed to 30%, or an average of £158,270, with 59% of non-London buyers paying more. Although as London growth starts to outpace other areas once again in the next couple of years, we expect the price gap will stop shrinking, meaning that we’re probably fairly close to the point where the gap is as small as it’s going to get.
