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More people, especially first time buyers, moving away from costly London market

More people living in London are opting to move house with one in five going to the north of England or the Midlands, new research has found.

It is suggested that some may be moving away due to the price of homes in the capital and while once they would have moved to surrounding areas they are now being pushed further afield.

But the analysis from Hamptons International also suggest that 2016 is likely to have been the peak of this kind of moving as prices elsewhere become more in line with those in London.

Overall home owners in London bought 74,000 properties outside the city in 2016, some 11,000 more than in 2015 and the largest amount since 2007 and a record 40% of first time buyers living in London ended up buying outside the capital.

The average Londoner buying outside the capital spent £388,000 on their new home, a total of £29 billion, the highest number since 2007, when 90,000 homes were bought, and totalling £32 billion.

The majority of Londoners leaving the capital stayed in the South of England with 80% moving either to the South East, the South West or the East of England. One in every six homes sold in the East of England and one in every seven in the South East, was sold to someone from London, some 17.3% and 13.9% respectively.

Of the 17 local authorities which border the capital, more Londoners bought homes than existing residents in 10 of them. But as price rises across the South of England, up 9.1% year on year, outpaced those in London where they increased 7.7%, both the proportion and number of Londoners heading further North has been steadily rising.

In 2016 some 20% of London leavers bought in the Midlands or the North, compared to 12% in 2014 and 10% in 2012 and the number of homes bought by Londoners in the Midlands rose by 21% compared to 2015, while in the North it grew by 13%.

With many Londoners leaving the capital for a bigger home, some 74% of London leavers bought a home with three or more bedrooms, spending an average of 18% more than local buyers.

While many take advantage of being able to buy larger homes for their money, for others, leaving London is the only way of getting onto the housing ladder with the number of first time buyers doing so rising from 20% in 2012 to 40% in 2016.

‘A move out of London has generally had more to do with changing priorities as people get older and start forming families than the housing market. But with affordability in the capital stretched, more Londoners are looking elsewhere to buy their first home. More too are likely to go further afield, with increasing numbers heading to the Midlands and North,’ said Johnny Morris, head of research at Hamptons International.

‘It is likely 2016 will be a peak for London leavers. While overall the year saw growth in Londoners buying outside of the capital, in recent months the pace has been slowing. A slower housing market in 2017 will likely mean that we see fewer Londoners buying outside of the capital than in 2016,’ he added.