The number of Londoners leaving the bright lights is falling, as a result of the subdued market in the capital and the return to the office. In the first seven months, Londoners bought just 31,620 homes outside the city, accounting for 5.3% of deals.
The rate of outmigration remains well below the pre-pandemic (2012-2020) average of 5.9%, and significantly lower than during the race for space sparked by Covid. Back then, house hunters wanted large gardens and properties that could accommodate homeworking.
Between January and July 2021, Londoners snapped up as many as 63,600 properties in the country and commuter towns, more than double the number recorded this year.
Londoners may still be moving out, and they are securing more space. But they are retaining their links with London and prioritising value over prestige.
"House prices in the capital have risen by 8% over the past five years, against an average of 26% elsewhere. "
This shift in the focus from aspiration to affordability is highlighted in the choice of destinations. Dartford is the most popular destination, where Londoners made up 67% of purchases, followed by Epping Forest (62%), and Tandridge (61%), the East Surrey authority which takes in Caterham and Lingfield. Climbing up the league are Thurrock (59%), Hertsmere (54%), and Basildon (38%).
This contrasts with the migration pattern of 2015, when traditional commuter towns like Broxbourne (66%), Sevenoaks (63%), and Welwyn Hatfield (60%) topped the list. In 2020, 87% of Broxbourne buyers came from London, a borough that also encompasses Cheshunt, Hoddesdon and Waltham Cross.
These choices underline the drop in Londoners’ purchasing power, which is forcing them to compromise. Property values have stood still or tumbled in some parts of the city, particularly the centre, making an ambitious relocation trickier.
House prices in the capital have risen by 8% over the past five years, against an average of 26% elsewhere. Over the past decade, Greater London has moved upwards by 23%. This is less than half the pace of growth elsewhere - 55%.
Most of the households that quit the capital are from Outer London boroughs. But people from Inner London are now taking this route, making up a record 30% of the total, up from 25% a decade ago.
But they potentially have to be content with much less. Their falling purchasing power affords them a home that is 32% smaller (533 sq ft) than the property they could have acquired in 2015 using proceeds of their sale. This is the equivalent of two large double bedrooms.
This smaller home comes with a larger price tag. The average Inner London mover spent £417,660 on their new home – 25% - more than in 2015. Outer London movers spent 34% more than in 2015.
Both groups were still able to enjoy more space, sometimes double the amount. This year, the typical Inner London household has sold a home worth an average of £655,580 to put down roots in a home that is 121% larger (1,178 sq ft), giving them double the space.
This may sound like a great outcome. However, in 2016, they were able to secure a property that was nearly three times the size of their former home, again highlighting the lacklustre performance of the Inner London market since that time.
Over that period, there has been another change. In 2021, residents of central London tended to make a lifestyle switch to the Cotswolds, Cornwall or the Dorset seaside resorts of Bournemouth and Poole. Now they are more likely to remain in the South or South East, yet more proof of the desire to maintain the connection with London. The ideal is now a commutable location.
Households waving goodbye to Outer London this year have sold up for an average of £509,800 and gained an extra 55% of space, against 72% in 2016. But the current state of the London market means that any outward migration will be a compromise deal.
