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Prime London on the move
With Londoners moving from prime areas now buying outside the capital in record numbers (2,005 households left the capital in the last 12 months), we have joined forces with property data analysts LonRes to better understand the dynamics of the prime markets and the things that drive them.
Staying in London
Londoners like to stay in their city – especially in the prime parts, but the proportion of Londoners leaving the capital is on the up. In 2017, 58% of Londoners chose to stay in the city, down from a peak of 67% in 2013. That was when price growth in London was outstripping the rest of the country by a wide margin and expectations of future growth were still strong. So it made sense for Londoners to continue benefitting from price rises by staying in the capital.
In 2014 the gap between prices in London and elsewhere peaked. Since then this gap has narrowed and London sellers have taken the opportunity to cash in on previous gains. Last year, with slower price growth in London’s prime postcodes and weaker expectations about future price growth, more moved away. The proportion of sellers staying in London has now fallen to 58%.
Yet there is still loyalty to the capital, especially in the more expensive neighbourhoods. Those selling up in high value prime central London were among the least likely to leave London. In 2017 63% of those selling in prime central London, chose to stay in the capital. Of those staying in London, 78% bought another home in a prime area.
Of the 42% of sellers leaving prime areas of London for a home elsewhere in the UK, relocation to the home counties remained the most popular choice. The commuter hotspots of South East England have consistently claimed the top spot, allowing buyers to maintain strong connections with London. Almost half (48%) of those leaving prime London chose to relocate to somewhere in the South East.
Those leaving prime London for another prime location outside the city were most likely to spend more. Forty percent of sellers in prime London moving to another prime location spent more as they traded up on size, compared with just 18% moving to a non-prime location.
Meanwhile those moving from non-prime areas of London tend to head to the East of England. Thirtyeight percent of non-prime London movers went East, compared with 23% of prime London movers. Price is a significant factor in this decision. Those moving from London in 2017 paid on average 30% less for a new home in the East of England than one in the South East.
Buyers who didn’t end up in the three most popular regions (South East, South West and East of England) tended to head for the Midlands or the North West of England. Excluding moves to the South East, South West and East of England, 25% of buyers moved to the West Midlands and 19% to the East Midlands. Unsurprisingly a higher proportion of buyers relocated to the North West (24%) where economic conditions and distance from the capital are more favourable than the North East (4%).
Moving into London
But it is not all one way traffic. Demand from existing residents and higher London prices means that just 12% of London buyers came from outside the city – with a combined total of 85% from the South East (32.5%) and East (52.6%) of England.
The bigger budgets required limit incomers to the wealthier groups from other parts of the country. Almost half (42%) of those moving to London from outside this year came from a prime area, up from 28% in 2010.