Looking Down The Barrel Of London’s Mass Real Estate Exodus
The rise of London-owned second homes in previously quaint counties including Cornwall and Somerset is by no means a new phenomenon. However, with increases in areas like Bruton, Somerset, soaring as high as 42% between 2019-2020 alone, it’s fair to say that things are heating up. The question is, what exactly does the so-called ‘London exodus’ look like as we move into the real new normal, and what does it mean for markets in the long run?
How many people left London during 2020-2021?
As many as 108,000 out-of-city purchases have been completed by Londoners since the pandemic began. This is the first time purchases of this nature have exceeded the 100,000 mark since way back in 2007, and the rate doesn’t look set to slow anytime soon considering that between January-July of this year alone, Londoners accounted for as many as 8.6% of all buyers outside of the capital. Of those surprisingly high buyer numbers, the vast majority chose to buy around 34.6 miles away from London, which is an average 12% further than distances noted in 2019.
What’s fuelling this switch?
With the pandemic changing everyone’s lives and the housing market in a major way, it’s not strictly difficult to see why Londoners have chosen to move in such large quantities. Stamp duty holidays certainly worked as a tempting cherry on top of the house moving cake when paired with other notable reasons to move, which may have included –
- Affordability: London average prices of around £648,942 are significantly higher than national averages of £256,405, meaning that many Londoners, especially first time buyers, have taken this chance to move for affordability benefits.
- Remote work: Remote work is perhaps the main reason for the current trend in moving, freeing more London-based workers to operate long-distance without having to worry about travel as a result.
- Cultural differences: The so-called ‘laid back’ countryside life is also appealing to many Londoners who, during the pandemic especially, realised the downsides of the always-on city culture.
What does this mean for markets overall?
For Londoners and small-town locals alike, understanding what this switch means for the housing market overall is becoming increasingly imperative, fuelling an age where more home buyers than ever are working with a mortgage broker to understand their needs and options. Far from spelling the end of affordable living outside of the city, however, early predictions show that London’s exodus could be a tale of two halves.
On the one hand, house prices across the UK are steadily increasing to match increased demand. However, with London house prices matching these losses with record value decreases as high as 2.01% in just a month, you could argue that increases elsewhere are on track to even themselves out.
As such, while it does spell setbacks for locals looking to buy right now, London’s pandemic-based exodus might not be such a bad thing for UK housing markets overall. We simply need to wait until the dust settles to see the full impact, and prospects, created from this significant time of change.
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