Lower mortgage rates have slowed the exodus of first-time buyers from London ,research suggests.
Analysis by Hamptons for the first half of 2024 found Londoners purchased 33,130 homes outside the capital, slightly below the 2015-2019 pre-pandemic average of 34,830.
First-time buyers made up 30% of all buyers leaving London during the first six months of 2024, a figure that has been trending upwards since 2013 but was capped this year by falling mortgage rates and lower house prices, the agent’s research found.
Improving affordability meant that first-time buyers purchased a record 48% of homes sold in London in the first half of 2024, up from 41% in 2023 and 28% a decade ago, Hamptons said.
Lower rates have saved them £273 a month on mortgage repayments than if they bought in the first half of 2023.
While first-time buyers leaving London are staying closer to the capital, the cost of upsizing means the average owner-occupier is moving 39 miles out of the capital, an all-time high, Hamptons said.
Aneisha Beveridge, head of research at Hamptons, said: “Falling mortgage rates are starting to turn the tide on the rising number of first-time buyers leaving London.
“Lower mortgage payments have pulled the cost of buying back below renting, bringing relief to those looking for their first home in the capital. First-time buyers with deeper pockets are looking again at London, choosing Clapham over Crawley and Wembley over Wycombe.
“But the number of first-time buyers leaving London has risen sharply over the last decade and levels remain high. Until 2016, new buyers were pushed out by soaring house price growth. But since 2022, rising mortgage rates made repayments on higher value homes an unaffordable outlay for many looking to buy their first home, pushing them in search of affordable areas outside the M25.
“Four years on from the pandemic and many city workers have settled into a new normal when it comes to going into the office. First-time buyers are more likely to stay closer to London than they have been over the last few years. Keen to retain their links with the capital, this has put the more affordable M25 towns firmly back on the map for younger homeowners. “However, in a bid to make their equity stretch further, movers continue to make longer distance moves out of the capital.”