Londoners purchased 33,130 homes outside of the capital in the first half of this year, according to an analysis of Countrywide data by Hamptons.
This was slightly lower than the pre-pandemic average of 34,830 homes bought outside of London and due to fewer people moving overall.
Based on current trends, Hamptons said this could mean around 76,000 homes will be purchased by Londoners outside of the capital this year, down from a peak of 100,910 in 2022.
Some 30% of people buying homes outside of London were first-time buyers, which Hamptons said had been “trending upwards” since 2013. However, this was capped this year because of lower mortgage rates and house prices.
Additionally, improved affordability saw a record 48% of homes sold in London being bought by first-time buyers in the first half of 2024. This was up from 41% in 2023 and 28% a decade ago.
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London leavers still at an advantage
Lower rates saved first-time buyers who purchased in London £273 per month on mortgage repayments, compared to if they had purchased during the first half of last year with a 15% deposit, Hamptons calculated.
Reduced mortgage rates also boosted the purchasing power of first-time buyers in the city, with an average property price of £443,550, which was £39,360 more than last year.
However, the mortgage savings made by a first-time buyer moving away from the capital were greater still and increased to a record £642 per month. Further, this cohort paid an average of £306,080 for their home, £30,010 less than 2023 and the lowest price since 2019.
Hamptons said because of higher property prices, purchasing in London was mostly done by those with more money. It suggested migration out of the city was driven by people who could not afford to move last year and could only afford a property outside the capital.
First-time buyers not going far
Although first-time buyers with less money are still moving away, many are staying close to London. The research showed that, on average, a first-time buyer leaving London moved 23.8 miles away, which was 2.6 miles closer than in 2023.
Also, as people return to working in the office, the share of first-time buyers leaving London for the countryside halved from its 6% peak in 2020.
Of the 15 local authorities that have seen a rise in first-time buyers moving from the city, 11 are in the South East or East of England where transport to the capital is easier to access.
Waverly in Surrey saw the largest increase in first-time buyers moving there from London, with a 257% jump from last year.
This was followed by Stroud with a 160% rise and Horsham with a 154% increase.
Stockport was the only Northern local authority that made the top 15 areas for London leavers, with a 94% increase year-on-year. More first-time buyers from the capital have also moved to West Northamptonshire in the East Midlands, which saw 82% more relocators from London than this time last year.
Unlike first-time buyers, former owner-occupiers are moving further afield for bigger homes.
The average mover relocated a record 39 miles away from London, six miles farther than in 2019 and 65% further than the average first-time buyer.
The first half of this year was also the first time since 2019 that movers made up a bigger share of Londoners buying a home outside the capital.
This increased from 47% in H1 2023 to 48% this year.
Falling rates ‘turning the tide’
Aneisha Beveridge, head of research at Hamptons, said: “Falling mortgage rates are starting to turn the tide on the rising number of first-time buyers leaving London. Lower mortgage payments have pulled the cost of buying back below renting, bringing relief to those looking for their first home in the capital. First-time buyers with deeper pockets are looking again at London, choosing Clapham over Crawley and Wembley over Wycombe.
“But the number of first-time buyers leaving London has risen sharply over the last decade and levels remain high. Until 2016, new buyers were pushed out by soaring house price growth. But since 2022, rising mortgage rates made repayments on higher-value homes an unaffordable outlay for many looking to buy their first home, pushing them in search of affordable areas outside the M25.”
She added: “Four years on from the pandemic and many city workers have settled into a new normal when it comes to going into the office. First-time buyers are more likely to stay closer to London than they have been over the last few years. Keen to retain their links with the capital, this has put the more affordable M25 towns firmly back on the map for younger homeowners. However, in a bid to make their equity stretch further, movers continue to make longer-distance moves out of the capital.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Lower mortgage rates keep first-time buyers in London – Hamptons
