With a rise in remote working and increasing demand for larger properties, more Londoners are moving out of the capital. But will the London exodus continue even after COVID-19?
During 2020, London leavers bought 73,950 homes outside of the capital. New research published by major London estate agency Hamptons shows this is the largest number in four years. This is especially significant as the housing market was even closed for seven weeks during the year due to COVID-19.
Collectively, London leavers bought a whopping £27.6bn worth of property outside of the capital. This is the highest amount since 2007, which is when outmigration peaked in London.
COVID-19 pushing more Londoners to move
The London exodus has been taking place for a number of years, but COVID-19 has pushed more people out and further away from the capital to purchase larger properties with outdoor space.
According to Hamptons research: “While leaving London has been a rite of passage for many, often families reaching life stage milestones, the effects of lockdown and the desire for space seems to have heightened this drift.”
Since the first lockdown, there has been a clear increase in Londoners moving outside of the capital. The stamp duty holiday has also likely pushed more buyers to bring future planned moves forward.
During the first half of 2020, London leavers purchased 6.9% of properties sold outside of the capital. This equated to 24,480 sales. Throughout the second half of 2020, this number increased to 7.8% and 49,470. In the second half of the year, London leavers bought £18.4bn worth of property outside of the capital. This is more than in any full year from 2008 to 2013.
Additionally, on average, London leavers are moving further away from the capital than at any time in the past 10 years. With the prospect of working from home regularly, London leavers are looking to move further away. Location preferences are changing as commutability isn’t as much of an important factor as before.
Future trends for the London exodus
More firms are committing to making long-term changes to remote working. This will push even more workers away from London. Many will likely look to areas with lower housing costs. While this trend already existed, this is expected to accelerate even more as work-life balance and location and property preferences continue to change. For many, these changes will be permanent.
Investors are also looking at rental trends that have changed due to COVID-19. This will help investors reassess their future investments and stay competitive. Even though London is still home to strong investment prospects, previous research from Hamptons International revealed there has been a rise in London property investors buying in the north of England and Midlands.
Aneisha Beveridge, head of research at Hamptons, says: “We expect this outmigration trend to continue into the first half of next year too. But usually as prices in the capital begin to flatline, which we forecast to happen in the second half of 2021, more Londoners decide stay put.
“Even so, given the housing market has been anything but normal since the onset of Covid, we expect to see the total number of homes bought by London leavers next year hit 2016 levels.”