It has become the modern-day space race: moving from London to the country in order to buy a bigger home. Yet, as house price increases in the country continue to outpace those in the capital, the amount of space Londoners can gain by moving out to the sticks is shrinking.
The price gap between a home in London and one in the country was at its largest in 2017. Back then, a rural property cost an average of £247,540 or 41% less than one in the capital. This meant a Londoner selling an average home in the city valued at £598,080 could gain an extra 1,008 sq ft by purchasing a property costing this much in the countryside.
Since then, however, the space gain has diminished. While the value of an average London home has now increased to £661,770, the value of a typical country property has soared to £460,600. This means the average London leaver today will gain only an additional 624 sq ft by trading in their city pad for a country home. This is 86 sq ft less than they could have got last year and 384 sq ft – or 38% – less than five years ago.
Although the space gained by a country move is now much smaller, buyers still have enough room to get a spare bedroom or a home office. Also, many London leavers who move to a rural location will gain more outside space, a key requirement since the pandemic. London leavers will get more bang for their buck if they head to a town or suburb. While the average amount of space gained has fallen steadily since peaking in 2014 at 1,726 sq ft, the typical home in a town or a suburb now costs £302,580, less than half an average one in London. This means a Londoner trading out to a town or suburb now could gain an additional 1,384 sq ft.
It is likely that the space gained by moving from London to the country will continue to decrease over the next few years given that we expect rural house prices to keep on catching up with London. Rural areas within 16 local authorities have already seen double-digit price growth over the past year, led by gains of 23% in the Test Valley, Hampshire, and 21% and 20% in the Surrey areas of Tandridge and Waverley respectively.
However, in 2024, we think the London market will start to outperform once again. This is likely to swing the scales and take the space race in a new direction.