London: Lack of housing affordability sees number of homebuyers driven out hit nine-year high

The number of Londoners buying homes outside of the city hit a nine-year high in 2016, according to research by the estate agent Hamptons International.

House prices in London are significantly higher on average than elsewhere in the country, and have risen at a rate far quicker than the national headline. An acute supply shortage and intense demand, from domestic and overseas buyers, fuelled prices.

This is pricing out many aspiring homeowners in London, who are forced to look beyond the city in search of affordability. Meanwhile, some existing homeowners have cashed in on their recent gains, and bought larger homes further out. And investors, stung by tax rises increasing the cost of doing business, are seeking value in cheaper areas outside of London.

Hamptons International said Londoners bought 74,000 homes outside of the city, a 17% rise on 2015, according to data from its parent company Countrywide, the largest stable of estate agencies in the UK.

This is the highest since 2007, when 90,000 purchases were made by Londoners beyond their city. Of those leaving London, 80% bought in either the south-east, south-west or east of England. One in six homes sold in the east of England went to London-based buyers.

"A move out of London has generally had more to do with changing priorities as people get older and start forming families than the housing market," said Johnny Morris, head of research at Hamptons International.

"But with affordability in the capital stretched, more Londoners are looking elsewhere to buy their first home. More too are likely to go further afield, with increasing numbers heading to the Midlands and the north.

"It is likely 2016 will be a peak for London leavers. While overall the year saw growth in Londoners buying outside of the capital, in recent months the pace has been slowing. A slower housing market in 2017 will likely mean that we see fewer Londoners buying outside of the capital than in 2016."

According to the Office for National Statistics (ONS), the average house price in London is £474,000. That compares to a UK average price of £217,000.