London buyers fuel markets outside the capital

AUGUST 2021

The pandemic-fuelled moves from town to country, a key housing trend last year, show no signs of easing.

During the first six months of 2021, Londoners purchased 61,830 homes outside the capital.  Not only is this a significant figure, but it’s a record-breaking one too.  Hamptons first began collecting London outmigration data in 2006 and this half-year purchase figure, together with other outmigration metrics, break multiple records for a six-month period. 

Londoners accounted for 8.6% of all home purchasers outside the capital – up from 6.6% in 2020.  First-time buyers represented a quarter of all London leavers – with both of these figures the highest on record.

People are also moving further than ever before.  The average Londoner buying outside the capital purchased 34.6 miles away – roughly the distance from Fulham to Farnham – some 3.6 miles further than pre-pandemic times in 2019.

There are lots of reasons behind these moves, not least changing work patterns which allow greater flexibility to work from home.  Fewer daily commutes, additional space and more property for less money have proved to be a winning combination for many Londoners buying outside the capital.  The stamp duty holiday only added to the appeal, fast-forwarding moves to the country and acting as an incentive for investors and second-home owners alike.

To put the figures into context, while overall transaction numbers in Great Britain have risen by 52% during the first six months of the year compared with the first six months of 2019, homes bought by Londoners outside the capital were up 85% on the 33,480 homes bought by them in the first half (H1) of 2019. 

Londoners buying outside the capital are spending more on their homes.  The average Londoner paid £389,975 for their new property.  Collectively this equates to £24.1bn spent on homes outside the capital by Londoners so far this year. This is more than twice the £11.9 bn spent in H1 2019. 

First-time buyers spent slightly less, averaging £318,000 on their first home outside London, but stayed a little closer to the capital (21.9 miles on average) than owner-occupiers moving out.  Investors, on the search for greater yields, together with second home purchasers bought the furthest away at 108.7 miles and 96.2 miles respectively.

Southern England proved to be the destination choice for the majority (75%) of London buyers, while 41% bought in the South East and 27% in the East of England.  Three in five London leavers moved to a small town or suburban location, while a third headed for the countryside.  Just 8% bought in another city, more than a third of whom were investors. 

It’s worth noting that while London now attracts more buyers from outside the capital than pre-pandemic, the numbers are still low relative to those leaving, meaning London’s population is likely to fall this year.

As for Londoners buying outside the capital, Hamptons research calculates that by the end of this year they will be responsible for purchasing 108,000 homes.  This will mark the first time that this figure has surpassed the 100k mark since 2007, a year when nearly 1.7 million homes were sold across Great Britain.

But given many Londoners have bought forward moves, and overall activity is predicted to slow, Hamptons’ also expect this number to fall back over the next few years.  Although next year is still likely to sit above the 72,000 average we saw in the three years leading up to the pandemic.