The London rental market may be in for a boom as figures show Londoners purchased over 60,000 homes outside the capital in the first half of 2021 - and many of those buyers were first timers.
This suggests the London market remains too expensive for many buyers then obliged to rent as they save for deposits.
An analysis by Hamptons found that Londoners purchased 61,830 homes outside the capital, the highest half-year figure since the agency’s records began in 2006.
Londoners made up 8.6 per cent of all buyers outside the capital, the highest proportion on record and up from 6.6 per cent in 2020. Hamptons says that the rise in flexible working combined with affordability barriers meant that first-time buyers made up a quarter of those Londoners buying outside the M25.
Aneisha Beveridge, head of research at Hamptons, says: “Pandemic-fuelled city outmigration shows no signs of slowing. Despite lockdowns easing and offices and restaurants reopening, Londoners have continued to re-evaluate where they want to live, with many bringing future-planned moves forward.
“While London now attracts more buyers from outside the capital than pre-pandemic, the numbers are still low relative to those leaving, meaning London’s population is likely to fall this year.
“The mix of those buying beyond the capital though has changed, with first-time buyers more likely to leave London than ever before. While second home buyers and investors have been spurred on by the stamp duty holiday, much of the uplift in Londoners looking outside the M25 over the last year has come from those buying their first home. The capital’s loss has been the Home Counties’ gain.”
The rise in flexible working combined with affordability barriers have meant that more first-time buyers have left the capital than ever before.
While those selling a home in London to make a permanent move out of the capital accounted for the majority (55 per cent) of buyers purchasing elsewhere in Great Britain, first time buyers made up a quarter of Londoners buying outside.
This proportion has been growing over time, but the pandemic has accelerated the change and meant that 40 per cent of first-time buyers left London to purchase their first home.
The average first-time buyer spent £318,300 on their first home outside the capital, £160,000 or 33 per cent less than someone who sold a home in London to move.
Overall Hamptons estimates that movers and first-time buyers purchased 49,470 homes outside the capital, more than the total number of homes sold in Wales last year.
Meanwhile investors and second home buyers made up 20 per cent, equating to a further 12,360 house purchases – nearly the same number of homes sold in Birmingham in 2019.
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