In 2023, Londoners significantly reduced their spending on properties outside the capital, with a 29% decrease to £28.7bn.
This marks a return to pre-pandemic spending levels, despite an overall increase in the rate of Londoners moving out of the city.
The number of homes purchased by Londoners outside the capital fell to a nine-year low of 69,190.
The trend of downsizing has become more pronounced, with 77% of London leavers buying cheaper and often smaller properties outside London, up from 60% last year.
The average spending on these properties was £415,020, reflecting a decrease of around £90,000 compared to 2022.
First-time buyers from London have also been a significant factor, now making up 30% of the purchases outside the city, a considerable increase from 12% a decade ago.
This change is largely driven by higher mortgage rates and living costs in London.
Aneisha Beveridge, head of research at Hamptons, said: “With only around a million homes changing hands across Great Britain this year, fewer Londoners crossed the M25 in 2023. However, those that did tended to be downsizers or first-time buyers.
“Downsizers, tired of London life, are looking further afield to release cash and clear their remaining mortgage balance.
“Meanwhile, higher mortgage rates have reduced first-time buyers’ purchasing power, pushing them to search for more affordable homes further afield.
“With mortgage rates expected to continue falling in 2024, the affordability picture should improve.
“We expect this to slow the pace of London outmigration somewhat, as younger Londoners can increasingly afford to buy locally.
“Upsizers, who have sat tight in a subdued 2023 market, are likely to come back into the fold as it gets cheaper to borrow, meaning they’re likely to dominate those leaving the capital next year.”
