London outmigration: How soaring mortgage costs are starting a new race to the country
As interest rates rise for the 14th time in a row, fresh research shows how Londoners are setting their sights on homes outside the capital, finds Annabel Dixon.


Escape the city! It’s been a well-trodden path for years, with Londoners leaving the bright lights for more space, fresh air, community spirit and — with any luck — an idyllic home outside the capital. Who hasn’t pored over bucolic property in Country Life? And the pandemic fuelled that trend in what was dubbed the ‘race for space’.
But this year, London outmigration has ‘increasingly been driven by need over want’ as higher mortgage rates cut buyers’ budgets, according to Hamptons estate agents.
Londoners accounted for 7.7% of all buyers outside the capital during the first half of this year, outpacing the average of 6.9% between 2015 and 2019.
The figure is down a little from 7.9% recorded in 2021 and 2022, when people were adapting to lockdowns.
Higher mortgage rates have particularly taken their toll on aspiring homeowners. First-time buyers made up a record 30% of Londoners who snapped up a home outside the city during the last six months. That’s up from 27% last year and more than double the 12% a decade ago.
Hamptons’ number crunching sheds light on why: a typical first-time buyer with a 15% deposit could save £8,656 in mortgage payments each year if they move to a more affordable area outside the M25. That sum would no doubt come in handy, particularly with the increased cost of living these days.
For others, a move out of London could allow them to pay down or even pay off their mortgage. So far this year, 18% of buyers who left London bought their new home without a mortgage — up from 14% in 2020.
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Affordability pressures are not just shaping where people move to. They’re also impacting what they buy.
The typical Londoner forked out £429,800 for a new home outside the city in the first half of this year, around £60,000 less than those who left in 2022, says Hamptons. And it may come as no surprise to discover that they’re leaning towards smaller homes. Some 37% of London leavers bought a one or two-bedroom home, up from 33% last year.
"Trading the city for a cheaper area outside the M25 might be the only option"
Zoopla has also spotted buyers looking for smaller, lower-value homes - or simply delaying a move altogether.
Agreed sales of four-bedroom family homes in July were down by 41% compared with the same period over the last five years. Meanwhile, sales of smaller homes and flats have fallen by a lesser degree, the portal reveals.
Aneisha Beveridge, Head of Research at Hamptons, explains: ‘Higher mortgage rates have paused the unwinding of arguably the biggest Covid-induced trend in the housing market – London outmigration.
‘Rather, this year London outmigration has increasingly been driven by need over want as higher mortgage rates reduce buyers’ budgets, pushing them in search of smaller homes in more affordable areas.’
But there’s no respite for borrowers yet. The Bank of England raised interest rates last week to 5.25%, pushing them to the highest level since 2008. So could that exacerbate the shift out of London?
If outmigration carries on at the same pace for the rest of the year, Hamptons reckons that nearly 54,000 Londoners could quit the capital to buy a home in 2023. That’s close to the number of homes — 56,000 — sold in Wales last year.
Beveridge adds: ‘The likelihood that mortgage rates will stay higher for longer may keep the pace of London outmigration up.
‘We’re also reaching the point where a large number of households who bought a home at the peak of the London market between 2014-2016 might be looking to move over the next few years.
‘And with property prices in parts of the capital lower today than when they bought, trading the city for a cheaper area outside the M25 might be the only option for those needing to upsize.’
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