Fewer Londoners ventured outside the M25 in 2023 to buy a home elsewhere (Picture: PA)

The generation of ‘London leavers’ may soon come to an end, as more and more people opt to snap up homes in the capital.

There was a mass exodus from the city during the pandemic, as people searched for more space, cheaper homes and greener pastures.

This continued as the cost of living crisis gripped the country. For many, the idea of buying in the capital became an impossible dream. Families decided to move out of London in order to be able to afford a bigger home.

But now, there are small signs of change.

According to new research, fewer Londoners ventured outside the M25 in 2023 to buy a home elsewhere.

Londoners collectively spent an estimated £28.7 billion on homes outside the capital this year, which was £11.7 billion less than in 2022, estate agent Hamptons found.

It highlighted two factors at play in the market – the first being fewer house sales taking place across Britain generally and the second being higher mortgage rates. These two factors have led to many ‘London leavers’ spending less on their new home than their previous property.

This year’s total was £20.1 billion lower than the £48.8 billion total spent by people moving out of London in 2021, when there was a spike amid the ‘race for space’ amid the coronavirus pandemic.

The estimated number of homes bought by Londoners outside the capital fell to the lowest figure in nine years (Picture: Getty Images/iStockphoto)

With fewer sales taking place generally across the market, the estimated number of homes bought by Londoners outside the capital fell to 69,190 in 2023, the lowest figure in nine years, since a total of 66,810 was recorded in 2014.

Aneisha Beveridge, head of research at Hamptons, said: ‘With only around a million homes changing hands across Great Britain this year, fewer Londoners crossed the M25 in 2023.

‘However, those that did tended to be downsizers or first-time buyers. Downsizers, tired of London life, are looking further afield to release cash and clear their remaining mortgage balance.

‘Meanwhile, higher mortgage rates have reduced first-time buyers’ purchasing power, pushing them to search for more affordable homes further afield.

The situation remains starkly different for ‘downsizers’ compared to ‘upsizers’ (Picture: PA)

‘With mortgage rates expected to continue falling in 2024, the affordability picture should improve. We expect this to slow the pace of London outmigration somewhat, as younger Londoners can increasingly afford to buy locally.

‘Upsizers, who have sat tight in a subdued 2023 market, are likely to come back into the fold as it gets cheaper to borrow, meaning they’re likely to dominate those leaving the capital next year.’

As Aneisha explains, a large number of people are still looking outside London for their home to save costs.

While big cities such as Edinburgh, Manchester and Bristol are seeing some of the migration, the majority are choosing quieter areas within the vicinity of the M25.

More than three-quarters (77%) of home movers leaving London spent less on their new home outside the capital this year, jumping from 60% in 2022.

This releasing of equity has enabled some to pay cash for their new home, rather than borrowing. Of the households spending less on their new home, 81% are estimated to have bought without a mortgage, up from just 51% in 2022.

About four in 10 of those trading the capital for elsewhere moved to a home with fewer bedrooms, up from a low of 23% in 2020, when the race for space was in full swing.

Londoners still made up 7.7% of all buyers purchasing property outside the capital in 2023, up from 7.3% in 2022 and 6.8% in 2019, the Hamptons report estimated.

However, the pace of London outmigration remains lower than when it peaked at a 15-year high of 7.8% in 2021.

Hamptons carried out the research using data from the Countrywide property services network, which spans across the UK and which Hamptons is part of.

Figures were scaled up to reflect the whole market using HM Revenue and Customs (HMRC) transactions data, making some assumptions for the number of home sales set to be completed in 2023.

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Fewer Londoners ventured outside the M25 in 2023 to buy a home elsewhere.