Londoners Buying Homes Far from Capital: Reasons Behind the Trend

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As UK households grapple with rising interest rates and a cost-of-living squeeze, an increasing number of Londoners are venturing far from the capital to purchase homes. According to a recent report by Hamptons International, the average distance Londoners are moving from the city has reached a record 39 miles between January and June 2024. This marks a significant increase of six miles compared to 2019 and represents a 65% jump from the typical first-time buyer's distance.

Aneisha Beveridge, head of research at Hamptons, notes that "four years on from the pandemic, many city workers have adjusted to a new normal for office attendance." In response to high living costs and the need to maximize their equity, movers are increasingly opting for longer distances from London.

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The pressures on UK households are intensified by elevated home loan rates, although they are declining from their 15-year peak reached in 2023. Despite the easing rates, the number of mortgaged properties taken into possession rose by 8% in the second quarter of 2024. The financial strain has led to a trend where over 25% of those leaving London for homes outside the capital have moved more than 100 miles away in the first half of 2024. This is a notable increase from the 17% average recorded between 2015 and 2019.

Areas such as Gedling and North Somerset, located in the Midlands and western England, have seen a dramatic rise in Londoners moving there, with relocations more than doubling in the first half of 2024 compared to the previous year. Londoners accounted for 48% of buyers in these areas between January and June.

Conversely, the trend of first-time buyers moving out of London has slowed down. The decline in mortgage costs and a reduction in house prices have made it more appealing for first-time buyers to purchase within the capital. In the first half of 2024, first-time buyers acquired a record 48% of homes sold in London, up from 41% in 2023 and 28% a decade ago.

Moreover, first-time buyers who do leave London are increasingly choosing more affordable areas closer to the capital rather than relocating to more distant countryside locations. The proportion of first-time buyers moving to rural areas has halved from its peak of 6% in 2020.

Beveridge highlights that "lower mortgage payments have made buying more affordable compared to renting, providing relief for those seeking their first home in the capital." As a result, first-time buyers with higher budgets are focusing on neighborhoods like Clapham over Crawley and Wembley over Wycombe.