The Great Migration
Towards the end of 2020, we wrote several blogs looking at the trends forecast for the housing industry in 2021.
As we find ourselves in a third lockdown, speculation continues to allow us to optimistically escape into a COVID-free future.
And now we have some figures to support the predicted trends.
There were signs in 2020 that people were leaving London en masse. Price of property, lack of space and possibly aggression of the virus in the capital were all speculative reasons. Thanks to new research by London estate agency Hamptons, we can delve a little deeper into this trend.
Ex-Londoners bought 73,950 homes outside The Big Smoke for a collective total of £27.6bn – the highest figures since 2016 and 2007 respectively. This suggests the average house bought cost around £359,702.
In February 2020, the average house price in London was £483,922, with a semi-detached house averaging at £590,170. This supports the notion that affordability is a major factor; however, perhaps not one that operates alone. Hamptons’ research notes that the number of homes bought outside London by Londoners doubled in the second half of the year, clearly motivated by the pandemic. While the Stamp Duty holiday will have played a part in this, remote working and the need for more space will have certainly driven what is quite dramatically being dubbed an exodus.
So, where are these people going?
According to Hamptons, much further than before. The average distance moved was 40 miles, the highest it has been in a decade, spanning Cambridge, Colchester, Brighton and Did cot on the compass points.
Seven oaks saw the largest increase in Londoners moving to the area, with 62% of homes bought being a 39% increase on the year before.
Rightmove has also published their research into Britain’s new hotspots, highlighting coastal and rural areas as becoming more popular than ever before. Could that mean we are set to see a resurgence of the seaside town, complete with skating rinks, arcades and crazy golf? This may be the case if staycations outlast the pandemic and may therefore prompt developers to look at some locations that have perhaps struggled to keep pace with urbanisation over the past several decades.
Rightmove’s research name checks Bruton in Somerset, Pitlochry in Scotland, Aylesford in Kent, Salcombe in Devon and Lightwater in Surrey as the top five places to see the biggest increases in searches from buyers, while seven of the top ten locations have sub-10,000 populations.
This opens up new possibilities for developers to invest in new areas, without the restrictions imposed by proximity to cities. Indeed, snapping up cheaper land in more rural areas then allows developers to fulfil buyers’ wishes of more space for home working, as well as to relax outside.
The other perk to buyers leaving London for pastures anew, while working from home, is that they will be receiving London salaries, and may therefore have access to bigger deposits and mortgages.
While many developers’ eyes will be lighting up at the new possibilities for their building strategy, it remains to be seen how this will impact residential development in London. Will it drive down prices in a bid to resist the lure of the surrounding counties and further afield? Will we see more buy to rent opportunities? And who will follow Redrow’s example by turning their attention away from London?