Londoners spend record £55bn on homes outside the capital in 2021

City exodus sparked by homeworking trend as buyers seek out properties with more space

Houses in Thamesmead, London. Residents headed out of the city in 2021 as they sought out homes with gardens and more space. Photo: PA

Londoners spent a record £54.9 billion on property outside the city in 2021 after the pandemic caused the largest wave of departures from the capital in a generation.

Home buyers based in London purchased more properties outside the capital in 2021 than any other year since 2007, when £36.6bn was spent, figures compiled by real estate consultancy Hamptons show.

The main driver for the shift was the sharp rise in remote working, particularly at the start of the year when England was mired in its third lockdown, causing many chosen to abandon the city for commuter towns where larger homes with gardens are more affordable.

The year 2021 "is likely to mark the largest outmigration from London for at least a generation,” said Aneisha Beveridge, head of research at Hamptons.

“Over the last 20 years, more homeowners have bought outside the capital than those who own in London today. City leavers have changed the geography of not only the commuter belt, but smaller towns and cities across Southern England. And this has become increasingly entrenched in a Covid world.”

It has been a year of highs and lows for Britain’s property market, which started 2021 with the difficult task of navigating through the third lockdown in England and similar restrictions in the rest of the country.

As a result buyers based in London purchased more than 112,700 homes outside the city this year – the highest number since 2007 – with first-time buyers making up almost a quarter of that tally.

On average, London sellers spent £18,980 less on their home outside the capital than the price of the property they sold, Hamptons said, with the average "London leaver" selling their home for £525,910 and spending £506,930 on their new property.

Also helping to drive the surge outside the capital was Chancellor of the Exchequer Rishi Sunak’s stamp duty holiday, which secured buyers a saving of up to £15,000 on the first £500,000 of a purchase price up until the end of June.

The tax break was then tapered to apply to the first 250,000 until the end of September.

St Albans in Hertfordshire was the top destination for first-time buyers moving out of London in 2021, Hamptons said, while Dartford in Kent was the main attraction for existing homeowners relocating outside the capital.

The Arun area of West Sussex, which includes Arundel and Bognor Regis, was the top destination for London-based buyers purchasing a second home, the estate agent found.

British house prices accelerated 10 per cent in November compared with a year earlier and are now almost 15 per cent higher than at the start of the pandemic despite the end of the stamp duty holiday.

The average price of a home rose 0.9 per cent to £252,687 in November from £250,311 the previous month, beating all expectations, said UK building society Nationwide.

Looking ahead, however, Ms Beveridge said there are still many uncertainties, as we still do now know what long-term impact the pandemic will have on the way we live our lives and how we work.

“It seems likely that hybrid remote working is set to continue in some form, which will keep outmigration numbers above pre-pandemic norms. However, after this year’s frenzy, we expect the numbers to fall back a little, particularly as house prices outside the capital are set to continue outperforming London over the next few years," she said.

"We expect to see the number of London purchases outside the capital average around 85,000 in both 2022 and 2023, around 10,000 more than during the five years leading up to the pandemic.”