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Londoners spending billions buying property outside city

London house prices forcing thousands to buy homes elsewhere

Londoners have been buying homes outside the city in almost record numbers as part of an exodus of first-time buyers and families fleeing the capital for more affordable options, according to new research.

Estate agency Hamptons International has reported that Londoners spent £30bn on homes outside the city last year.

This was a 7.8% rise on 2017, when Londoners bought £28bn-worth of non-London properties, and the highest figure in a decade.

Affordability is the biggest motivator for those leaving the capital, with one first-time buyer telling Which? exclusively that home ownership in London felt like an ‘impossible dream’.

Here, we look at the most popular destinations for Londoners buying homes and explain how buying a property in London might still be possible, even with limited funds.

  • Whether you’re buying in London or not, you can have a free chat about your mortgage options by calling Which? Mortgage Advisers on 0800 197 8461.

Where are ex-Londoners buying property?

Hamptons analysed transactions from all its offices across Britain, looking at the number of homes sold in each local authority and the percentage bought by Londoners.

More than three quarters (77%) of the 74,350 Londoners buying homes elsewhere moved to the South East, South West or East of England, according to Hamptons’ research.

Someone from London snapped up one in five (19%) homes sold in the East of England and one in every seven (15%) in the South East.

Last year Broxbourne in Hertfordshire was the top location in the East of England as nearly three quarters of homes were purchased by Londoners.

The table below shows the most popular local authority for Londoners to move to in Britain.

Region Local authority % of homes bought by Londoners in 2018
South East Sevenoaks 52%
South West Bath and North East Somerset 52%
East of England Broxbourne 72%
East Midlands Daventry 17%
West Midlands Stoke-on-Trent 7%
North East Middlesbrough 16%
North West Liverpool 10%
Yorkshire & Humber Doncaster 13%

Source: Hamptons International

House prices in ex-Londoners’ favourite towns

You can see a snapshot of each of the towns listed above, along with their average house prices (based on the UK House Price Index), in the gallery below. The average house price in London is £473,822.

Why are Londoners buying property elsewhere?

Which? spoke to Kate Martin, a first-time buyer who recently moved out of London after renting there for 10 years in order to buy a flat in Greenhithe, Kent.

The village, near Dartford and Bluewater Shopping Centre, is around 23 miles from the capital.

Kate, 35, combined inherited money with cash she’d saved to get a foot on the property ladder.

While she ‘loved living in London and could never see [herself] leaving’, Kate felt first-time buyer schemes in London would be too costly.

Kate said: ‘All my research showed the prices were way out of line with what I was earning.

‘Even when I thought it may be achievable through shared ownership, when I looked at how much I’d be paying on a mortgage, rent, service charges and bills, it was such a huge proportion of my income that it just didn’t make sense.

‘I didn’t see anywhere where the mortgage would cost less than £1,000 a month. Generally it was £1,200, then bills, travel and ideally being able to go out once in a while!

‘So I continued to rent for many years, thinking home ownership was an impossible dream.’

Kate Martin

Kate spent a year boosting her savings before buying her purpose-built one-bedroom flat in Kent for £150,000.

She secured a £600-a-month, 25-year mortgage on a fixed interest rate of 2.67%.

‘It’s less than I was paying in rent for a double bedroom in south-west London,’ says Kate.

‘It’s more expensive to travel and the length of my commute is an issue but financially it’s a much, much easier situation – and paying that amount gives me spare money to improve the place as well.’

Last year separate research by Hamptons International claimed there had been a 16% year-on-year rise in the proportion of Londoners buying outside the capital.

How can you still buy property in London?

Earlier this month Which? revealed where you can buy the cheapest properties in London, including a £100,000 flat in Bexley. People looking to buy a house or flat in London with a small deposit have a number of options, including:

Shared ownership

The shared ownership scheme allows you to buy a share of the property – typically between 25% and 75% – from a housing association, while paying rent of up to 3% on the remaining share.

Most buyers will need to put down a minimum deposit of 5%, but only on their share of the property price.

Our short video explains the basics of shared ownership.

95% mortgages

95% mortgages, where you buy with a 5% deposit and take out a mortgage on the rest, are becomingly increasingly popular, with more lenders offering lower rates.

You can spread the cost of loan over a longer period than in the past, with 35-year mortgage terms commonly offered.

London Help to Buy

The London Help to Buy equity loans scheme allows first-time buyers and home movers to borrow up to 40% of a property’s value from government.

They can purchase the home with a 5% deposit and get a mortgage for the remaining 55%.

London Help to Buy is only available on new-build homes priced £600,000 or less.

Help from a family member

Many parents lend or gift money towards their child’s deposit and there are other options which require less upfront cash such as guarantor mortgages, joint mortgages and remortgaging.

Our full guide on how parents can help first-time buyers has more information.

Get expert, one-to-one mortgage advice

If you’re living in London and looking for advice on buying your first home, or finding the best mortgage deal, you can have a free consultation with Which? Mortgage Advisers by calling 0800 197 8461 or filling in the form below for a free callback.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

Categories: Money, Mortgages & property

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