The number of Londoners buying homes outside the UK capital soared to a record high in the first half of this year as the pandemic encouraged residents to quit city life and purchase elsewhere in Britain.
Londoners bought an estimated 61,380 homes outside the capital in the first half of 2021, according to Hamptons — the highest figure for any six-month period since the real estate consultancy began keeping records in 2006.
Aneisha Beveridge, head of research at Hamptons, said “pandemic-fuelled city outmigration shows no signs of slowing”, despite lockdowns easing and offices and restaurants reopening.
“Londoners have continued to re-evaluate where they want to live, with many bringing future-planned moves forward,” said Ms Beveridge.
“While London now attracts more buyers from outside the capital than pre-pandemic, the numbers are still low relative to those leaving, meaning London’s population is likely to fall this year.”
City migration has been a key trend during the pandemic, as buyers hunt out bigger homes with gardens after a series of lockdowns that saw many people working from home.
The trend was boosted further by Chancellor of the Exchequer Rishi Sunak’s stamp duty holiday on residential property purchases, unveiled in July last year, to bolster the market during the pandemic.
The move caused prices to surge 8.5 per cent in 2020 despite the wider economy being hammered by the fallout from Covid-19, however annual house price growth cooled in July as the rush to buy before the tax break expired on June 30 began to fade.
The Nationwide House Price Index slipped to 10.5 per cent in July from 13.4 per cent the previous month.
The stamp duty holiday, which removed the purchase tax on the first £500,000 of a property’s value, now only applies to the first £250,000 of a purchase, with the tax break disappearing altogether at the end of September.
However, this has not been the only driver for buyers fleeing the capital. Ms Beveridge said the mix of those buying beyond the capital though has changed, with first-time buyers more likely to leave London than ever before.
“While second home buyers and investors have been spurred on by the stamp duty holiday, much of the uplift in Londoners looking outside the M25 over the last year has come from those buying their first home,” Ms Beveridge said.
“This has been largely driven by affordability and flexible working patterns that have enabled people to work from home.”
While overall transaction numbers in the UK rose 52 per cent in the first half of this year compared with the same period in 2019, Londoners' purchases outside the capital are up by 85 per cent, with Londoners paying £389,975 ($541,980) on average for their new pad.
This means Londoners have spent a collective total of £24.1 billion on homes outside the capital so far this year, more than twice the £11.9bn spent in the first half of 2019.
Londoners who did purchase outside the capital moved 52 kilometres away, on average, with 75 per cent buying in the south of England, 41 per cent in the south-east and 27 per cent in the east of the country. While three in five Londoners moved to a small town or suburban location, a third headed to the countryside.
If current trends continue, Hamptons calculates that by the end of this year Londoners will have purchased 108,000 homes outside the capital.
“This will mark the first time this figure has surpassed the 100,000 mark since 2007, a year when nearly 1.7 million homes were sold across Britain,” Ms Beveridge said.
“But given many Londoners have brought forward moves, and overall activity is predicted to slow, we expect this number to fall back over the next few years. Although it’s still likely to sit above the 72,000 average we saw in the three years leading up to the pandemic.”