The rate at which Londoners are leaving the capital to purchase a home has fallen to its lowest level in over a decade. The return to the office, combined with falling house prices in the capital, have reduced the number of moves taking place.
In 2024, Londoners bought just 5.7% of all homes sold outside the capital, down from a peak of 8.2% in 2022 and the lowest proportion since 2013. This represents a total of 57,020 purchases, a 45% fall from the outmigration peak in 2021 and 19% below the pre-Covid average, partly due to fewer people moving home in general.
The capital's homeowners haven't had the housing market on their side in recent years. They've had to adapt to higher interest rates and pandemic trends, which have shifted against them and suppressed property prices in the capital. This has limited their ability to move. Consequently, the number of existing homeowners moving out of London has fallen by 41% over the past 10 years.
First-time buyers from London, however, are bucking the trend. They made up a record 31% of London leavers in 2024 - more than double the proportion in 2013. Overall, London-based first-time buyers purchased 17,680 homes outside the M25 this year, 69% more than a decade ago.
Ultimately, these two groups face different motivations and financial constraints. First-time buyers, eager to escape London's expensive rental market, are increasingly looking beyond the capital for their first property purchase. As mortgage rates have fallen over the course of 2024, it's generally become cheaper to buy than rent again, even with a small deposit. But the high income and savings bar needed to buy a home in London has pushed more aspiring homeowners beyond the capital.
However, for existing homeowners, the sums are more complex. Stagnant or falling property prices in parts of London have limited equity growth, while house prices elsewhere have risen more rapidly since the pandemic. This disparity has eroded the purchasing power of London homeowners looking to move out, often forcing them to look even further afield for value.
Average property prices have risen 39% outside the capital over the last decade, compared to 26% growth in London. However, in some areas of the capital such as in central London, prices have fallen over that period, reducing the incentive to move. Since 2020, average house prices have risen twice as fast outside of London (10% versus 5%).
Indeed, the data shows that those leaving London are moving further than ever before. The average London leaver relocated 33.1 miles outside the capital in 2024, 19% further than the pre-Covid average. Existing homeowners are moving even further, with an average distance of 45.4 miles - 13.7 miles more than before the pandemic. However, first-time buyers don't stray quite so far, moving an average of 25.5 miles this year, down from a peak of 26.3 miles in 2023.
The areas that have bucked the trend and seen more Londoners purchase homes there than pre-Covid tend to be the more affordable local authorities just outside the M25. Brentwood in Essex has seen the most significant increase in London buyers, with 47% of homes sold to Londoners in 2024, up from 23% in 2019. Other areas seeing substantial increases include Rushmoor, Colchester, and Epsom & Ewell, all located in the East or South East of England. These tend to be more affordable locations with good transport links into the city, popular with first-time buyers.
Looking further afield, Wychavon, in the West Midlands, is the local authority outside the South of England that’s seen the biggest rise in London buyers and sits in thirteenth place. Here, Londoners purchased 11% of homes sold this year, up from 3% in 2019.
Blackpool, where Londoners purchased 9% of homes sold this year, up from 4% in 2019, is the first local authority in the North of England on the list, recording the twenty-fourth largest increase in the country. However, most of these London buyers were purchasing an investment property. The average gross yield on a new buy-to-let purchase in Blackpool reached 10.1% this year, compared to 5.7% in London.
Looking ahead, we expect an uptick in London outmigration numbers next year as the capital's property market begins to pick up as mortgage rates edge down further. This could encourage a generation of more recent homeowners who have been restrained for a decade by limited or no price growth in the capital to make their move. However, with mortgage rates likely to remain above historic levels, movers are likely to continue looking further afield to secure the home they could have afforded in the Home Counties a decade ago.
