The number of people in London who have decided to leave and the city and buy homes outside the capital but more first time buyers are staying, new research has found.
In the first half of 2018 some 30,000 moved out, a rise of 16% compared to the same time last year and a rise of 61% compared with the first six months of 2008, according to the analysis by Hamptons International.
While most move out to stay in the South of England, the study also found that since 2010 the proportion leaving to move to the North of England or the Midlands has tripled.
Overall, some 38% leave London for the South East, down 3% compared to the first half of 2017 and the firm suggests this is due to affordability issues. The East of England is the next most popular destination with 30% of London leavers moving to the region. One in every six homes sold in the East of England is sold to a London leaver.
However, as more people are priced out of the South, the proportion of Londoners leaving for Northern England or the Midlands has more than tripled since 2008. In the first half of 2018, one in five, 21%, of London leavers moved to the North or Midlands, up from just 6% a decade ago.
Many Londoners leave the capital to buy a bigger home. The average Londoner buying outside the capital spent £424,610 on their new home, 1.6 times more than a buyer from elsewhere. This is just under the average price of a detached home in the South at £495,600.
But more people are making a bigger move by moving further and buying a larger home sooner to avoid having to pay stamp duty on additional moves as they trade up. The average stamp duty bill for buying a detached home in the South is £14,780, compared to £5,358 in the North.
Londoners bought more homes than existing residents in seven local authorities, most of which border Greater London. Broxbourne, Slough, Harlow, Thurrock, Brentwood, Dartford and Wokingham saw more homes bought by a London leaver than by a local resident this year.
Other popular destinations further afield include Bath and North East Somerset where 42% of homes were bought by Londoners and East Dorset where 25% did so.
Some 31% of first time buyers living in London ended up buying their first home outside the capital, almost double the proportion in 2013 when it was 16% but this is a 2% fall compared to last year.
The firm suggests that stamp duty relief and availability of Help to Buy has acted as a support for first time buyers wanting to stay in the capital. But even though more Londoners are buying their first home in the capital than last year, more are being priced out of the South altogether.
In the first half of H1 2018 some 85% of first time buyers leaving London moved to the East or South East to maintain their London connection, but this is down from 95% just four years ago. Now, more than one in ten, 12%, of first time buyers leaving the capital are moving to the North or Midlands, four times the proportion in 2010.
‘With affordability stretched, more Londoners are moving out of the capital to find their new home. The proportion of London leavers heading North has tripled in the last 10 years. More people are making a bigger move and buying a larger home sooner to avoid having to pay stamp duty on additional moves as they trade up. But for many, this means heading further North,’ said Aneisha Beveridge, research analyst at Hamptons International.
‘However, more first time buyers are staying in the capital to purchase their first home than last year. The savings from stamp duty relief and the availability of Help to Buy has meant that more first time buyers are able to remain in London than before,’ she pointed out.
‘But raising a deposit remains a hurdle for many, which helps explain why increasing numbers of first time buyers who leave London are heading North,’ she added.
