House prices drive London exodus as buyers seek better value
Net departures total 93,000, up more than 80 per cent in five years
by: Judith Evans
The number of Londoners leaving the capital for elsewhere in the UK has reached its highest level in at least five years as steep housing costs push more people in every age group away from the city.Net departures to places outside London totalled 93,000, up more than 80 per cent from five years earlier, in the year to mid-2016. This was led by people in their 30s, whose departures reached a post-crisis high, according to analysis by property agents Savills.The city’s population growth has continued, with the total figure reaching 8.8m in mid-2016, but this was driven by arrivals from overseas and by births. Departures to elsewhere in the UK increased even among people in their 20s, the sole group with a net internal movement towards London.“Whether it is people looking for more space as their family grows, or younger households who have a much better opportunity to get on the housing ladder outside the capital, housing costs are contributing to this movement,” said Lucian Cook, director of residential research at Savills. “It reflects how housing costs are a risk to London’s competitiveness in a domestic sense.”
Among homeowners leaving London, the average house price in the capital was £580,000, against an average of £333,000 for the areas they moved to, meaning they could save on average almost £250,000 by relocating. But some saved much more: for example, homes in Cambridge, the most popular destination among people relocating from Kensington & Chelsea in central London, cost on average £1.5m less than those in the London borough.Residents of Camden saved on average £478,000 on their house price by migrating to St Albans in the commuter belt north of London, their favoured destination. The most popular destination for Londoners overall was Dartford in Kent, but thousands opted for more distant cities such as Bristol in the south-west, the data show.The Big Read
Renters have also faced intense pressure on costs, as rents rose 34 per cent in 10 years in the capital.In total, 292,000 people moved out of London for other UK destinations in the year to June 2016, the latest period for which numbers have been released. Net annual departures by people in their 30s reached 34,500, up 68 per cent from five years earlier.Mr Cook said these figures may represent the peak of the trend. House price growth has begun to cool in the capital, due in part to strict mortgage regulations introduced three years ago.Already, figures from the Hometrack UK Cities index show that house price growth in regional cities is outstripping the rate in London, although absolute prices in London remain far higher.Mr Cook said: “If you look at what is happening to London at the moment, rates of house price growth have slowed dramatically. That’s not just a reflection of underlying political and economic uncertainty — it’s because you are hitting up against the limits of mortgage regulation.”But he added that the effects of the London exodus would endure in the boost to house prices in Londoners’ favoured destinations. “Equity has been exported out into other markets, and that’s a classic driver of the ripple effect in terms of prices,” he said.“High levels of migration from London to Oxford, Cambridge, Bristol, Bath and Brighton have shown themselves in higher house price growth compared with their surrounding areas.”
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