Property News

Leaving London: destinations and house prices

For as long as London has existed, people have moved in and out of it. However, rarely has the capital seen the sort of exodus as it is currently experiencing.

ONS statistics released in June 2019 show that the numbers of people leaving emigration reached their highest ever recorded levels in 2018. In the twelve months to June 2018, 340,500 Londoners left the city to live elsewhere in the UK.

Most of those who leave London remain within easy commuting distance of the capital. Theirs is an often precarious balancing exercise involving affordable sold property prices, commuting costs, length of commute and the amenities of their new home location. Beyond the M25 and the Home Counties, Scotland remains the destination that attracts the next biggest group of ex-Londoners. Within England, Birmingham, Brighton and Hove, Thurrock and Bristol are recorded as the next most popular destinations. However, increasing numbers of ex-Londoners are choosing other places to make their new homes. Specifically, many of them are migrating further northwards.

Little more than 10 years ago, an estimated one per cent of those leaving London for a new life elsewhere bought or rented homes in the north of England. Today, the most recent figures from Countrywide suggest that 13 per cent chose to do so in 2019.

So, what has changed? And, specifically, what is drawing ex-Londoners to the north?

The first question to ask is why so many people choose to leave London. What is it that the capital cannot offer them that they decide to look for elsewhere? And why is northern England proving increasingly attractive?

High asking and sold property prices are only one part of the picture. The day-to-day cost of living is frequently cited (a recent article in the Guardian quoted an ex-Londoner who said that a £3.50 charge for a cup of tea was the straw that broke his camel’s back). So too are the overcrowded commutes and the length of time that it seems to take to travel anywhere in London by public transport. Some Londoners like life in the capital enough to put up with these issues, but think again when they have children and come up against the perennial issue of schools. Research tracking the average ages of those making the move out of London appears to corroborate this: net migration out of the capital is highest among those in their 30s - who are also the age group most likely to be having children. Conversely, the only age group with a net migration into London are those in their 20s - or, in other words, the age group in which most new graduates are concentrated.

Property price - income ratios

The widening ratio between property prices and average income is a concern for many, but especially for those living in the capital. Currently standing at 12.9, it’s all too clear why so many have to put their home owning aspirations on ice - or think about moving elsewhere. Newcastle and Sheffield are a long way from London but that distance is also reflected in their property price-income ratio: just 5.8. With HS2 apparently now given the green light, it will be interesting to see the effect (if any) on both this ratio and on the numbers of London emigrants.

Although ratios are popular with economists and industry analysts, many regular prospective home buyers prefer to deal with average selling prices. In London, last year, this figure stood at £475,000 - well out of the reach of most teachers (with an average London salary of just under £30,000) or nurses (an average salary of just over £26,000 for a Registered Nurse), to say nothing of the hundreds of thousands of Londoners working on a zero contract basis.

Sheffield
With two thriving universities, Sheffield has long been popular with the nation’s students. Many of those who study there either as undergraduates or postgraduates choose to remain in the city after graduation (research from 2016 suggested that 20 per cent of those who moved to the city to study at one of the two universities were choosing to stay on and take up work in Sheffield). They are now being joined by others migrating from London. Some, undoubtedly, will be those who have happy memories of their own student days in the city or family connections there, but others are choosing it for its relatively affordable housing, its vibrant social scene, rejuvenated city centre and easy access to the Peak District.

Property in the S10 postcode is as popular with young professionals and families as it is with students. Competition for houses - typically traditional terraces - is fierce, with many student landlords keen to add to their portfolios, but prices have remained buoyant over the last few years. The postcode also offers larger family homes on spacious plots in areas such as Ranmoor and Fulflood, although prices are significantly higher than for the terraces closer to the University of Sheffield. Further out, Nether Edge and Dore are also popular with buyers with good budgets.

Newcastle
Another hugely popular student city, Newcastle has also benefited from a pool of young professionals choosing to make the city their permanent home after finishing at university. Now, however, a comprehensive makeover of the city centre has ushered in a new range of bars, restaurants and businesses and, in turn, is attracting incomers from London looking to replicate something of the vitality and diversity of the capital’s social and professional scene. Average property prices currently stand at around £128,000 but those in the know anticipate a rapid rise - perhaps by as much as 18 per cent over the next five years. Waterfront properties are particularly popular with young professionals and consequently much in demand among investors. Those with a view of the Tyne Bridge often attract a premium.

Leeds, Manchester and Liverpool
Other northern cities that are perhaps more used to enjoying popularity with London emigres include Leeds (currently benefiting from Channel 4’s relocated national HQ and potentially set to benefit from the arrival of HS2), Manchester and Liverpool.

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Source: Nethouseprices.com 17.02.20

Comments:

Abby said:

London property prices continue to go up because of the lack of supply and growing demand. The fundamentals of the London property market highlight the issue of affordability. We see the greatest opportunity for capital growth in outer London due to affordability issues. The greatest demand for London property investments will be from everyday people; it is therefore key to match their affordability constraints while meeting their requirements. Targeting areas with 35 minute commute into Central London will reap the greatest rewards out of all property investments opportunities in London.

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