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Why Londoners are buying properties outside the city…

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Though this is already a substantial figure, an August report from Hamptons indicates that this trend is still accelerating.

In the first six months of 2021, Londoners purchased a remarkable 61,830 homes elsewhere – almost as much activity as the whole of 2020.

It is when compared to the first six months of 2019, however, that the full significance of Hamptons’ statistics come to light. As the real estate agents point out, “compared with the first six months of 2019, homes bought by Londoners outside the capital were up 85% on the 33,480 homes bought by them in the first half of 2019.”

This huge influx of buyers was consistent in its collective choice of destination. Three in five leavers transplanted themselves into towns and suburban areas – and those areas were almost exclusively in the Southern and Eastern parts of England.

For those with a vested interest in property buying habits, this trend raises two key questions: why are people leaving London? And why are they choosing to go South and East?

Leaving London

At first glance, it would be easy to assume that London leavers are motivated purely by affordability.

However, recent research by the Halifax has found that London is far from the least affordable city in the UK. According to its study, which uses price-to-earnings ratios to work out affordability, several cities are more costly than London – including Winchester, Oxford, Chichester, Cambridge, and Brighton.

Notably, all of these cities are based either in South or East England – the very places to which Londoners are moving. Clearly, the exodus from London isn’t as simple as a search for cheaper housing.

Nor is the move necessarily due to a loss of interest in London as a place of work and leisure: after all, huge parts of South and East England allow for easy commutes into the capital, suggesting that those moving to such areas still want to retain their connection to their former homes.

As such, London leavers are clearly attracted to something that the city can’t give them. The Hamptons study suggests as much, pointing to the much-reported changes brought about by altered “work patterns which allow greater flexibility to work from home”, leading to “fewer daily commutes.”

The London Assembly Housing Committee has found similar results, noting that private outside space, a more spacious home, or nearby green spaces were all factors in some Londoners’ desires to move elsewhere.

If the reasons for leaving London are clear, the question remains: why the South and East of England?

The appeal of the East

The desire for more space – indoor and out – is connected to the desire for a higher quality of life.

In that light, it’s no wonder that London leavers should gravitate towards the South and East. The Halifax Quality of Life Survey 2020 names a number of towns within those regions as high-ranking according to its assessment of residents’ happiness, including parts of Hertfordshire and Essex.

Besides the natural beauty and strong commuter links that many of these areas possess, home buyers will doubtless see the advantages in their strong economies. A 2019 report from Cambridge Econometrics, for example, points out that “Despite not containing any of the top 20 largest urban areas in the UK, the East of England is the 4th most prosperous region in England.”

Similarly, the European Commission has noted that the East of England is “one of the fastest growing regions in the UK, both in terms of population and economy.”

These pre-pandemic statistics give some indication as to the region’s potential – not only as a good location for employment in its own right, but to the value of properties that London leavers buy there.

In fact, the UK House Price Index for April 2021 found that the East of England enjoyed highest monthly house price rise in the UK.

As such, when reflecting on those choosing to buy property outside London, it’s important to understand the appeal of where they’re going. With spacious surrounds, strong local economies, good prospects for property values, a higher quality of life is clearly on the cards in areas like Hertfordshire, Sussex, and Essex.

*Reece Mennie is CEO of HJ Collection, which recently successfully repaid £3.4 million to its initial investors

https://www.propertyinvestortoday.co.uk/breaking-news/2021/9/why-londoners-are-buying-properties-outside-the-city