Fewer buyers leaving London but levels remain above pre-pandemic period

Fewer buyers are leaving London to purchase property elsewhere, research suggests.

Analysis by Hamptons has found that the share of Londoners purchasing property outside of the capital slowed in 2022, back towards pre-Covid norms. 

In 2022, Londoners bought 7.3% of all homes sold outside the capital, down from a 14-year high of 7.8% in 2021 amid the so-called ‘race for space.’

Proportionally though, with flexible working becoming the norm for many, the rate of London outmigration remains above 2019 levels when 6.8% of homes in the regions were bought by a Londoner, the research found.

Londoners are set to purchase 81,200 properties outside the capital in 2022, almost 20,000 fewer than when London purchases peaked at 100,540 in 2021, Hamptons said.

However, this figure remains 8% up on the 2015-19 average of 74,970 and reflects the fact that 300,000 fewer homeowners moved in 2022 than in 2021.

First-time buyers made up a record 28% of those buying outside the capital, equating to 22,470 purchases, according to the research.

Due to lower transaction numbers overall, London based first-time buyers bought 5% fewer homes in the regions than in 2022.   

However, mover numbers, those selling a home in London, dropped by 31% year-on-year.  

This means that buyers making a permanent move out of the capital purchased 62,210 homes in 2022 - 23% fewer than last year’s peak, but 8% more than in 2019

With an average purchase price of £371,670, 30% more than average, first-time buyers leaving the capital are set to spend £8.35bn on property in 2022, Hamptons said.

This figure exceeds the total value of all new homes sold in London in 2021.

Meanwhile, London-based investors made up a record 21% of those buying in the regions, up from 16% in 2021 and 9% a decade ago.

Together with second home buyers, they spent a total of £4.89bn on property outside the capital in 2022.

The average Londoner bought a property outside the capital with 2.9 bedrooms, slightly down from a peak of 3.0 in 2020 when Covid was at its height and the race for space was a primary driver of sales.

A third of Londoners buying outside the capital in 2020 bought a home with four bedrooms or more compared to 26% in 2022.

A third of movers trading their London home for elsewhere purchased somewhere with four beds or more, compared with 13% of first-time buyers, the research showed.

The average Londoner buying outside the capital purchases 34.0 miles away, 1.2 miles further than last year which itself was a record, Hamptons said.

Investors purchased furthest away, at an average of 109.8miles, a figure which has doubled since 2013.  They are followed by movers at 26.6 miles and first-time buyers at 23.2 miles.  The average first-time buyer moved 1.2 miles further than last year.

Aneisha Beveridge, head of research at Hamptons, said: “London outmigration appears to have passed its peak.  While 2021 was dominated by space seekers swapping the bright city lights for pastures green, 2022 signalled the return to the office.  

“That said, the widespread popularity of flexible working has meant that Londoners continue to move that little bit further out of the city to gain more space, meaning outmigration numbers remain higher than pre-Covid times.

“Next year, we expect the pace of London outmigration to cool further as pent-up demand from the Covid related trend wanes.  But affordability pressures, and in particular the cost of higher interest rates, may mean that more Londoners are forced to move further afield to buy a home.  

“Our latest data suggests that first-time buyers in particular are sacrificing location in order to climb onto the housing ladder.  And this looks set to put a floor under London outmigration numbers in 2023.”

Top 15 local authorities with the biggest increase in London prospective buyers