The proportion of Londoners leaving the capital for the Midlands or northern England has tripled since 2010, according to estate and letting agents, Hamptons International. The profits made on selling a London property are often being put towards bigger, cheaper houses further north.
Hamptons’ research published in August 2018 showed the average London resident relocating pays £424,610 for a new property. This can buy a large detached house in a Birmingham suburb but would only stretch to a two-bedroom flat in east London. House prices in cities are becoming increasingly higher across several UK cities, but England’s north-south divide is hard to deny. It can be highlighted by the difference in stamp duty where the average bill for purchasing a property in the south is £14,780 compared with £5,358 in the north of the country.
What needs to change in order to stop the number of Londoners who relocate increasing every year? By understanding why people are leaving and in particular choosing somewhere northern, it can highlight what needs to change in the city to encourage more residents to stay there either renting or owning property.
London Exporting People Elsewhere
London was named the most expensive city in Europe for renting accommodation for the third year running. Data analysts ECA International also found that Londoners pay significantly more than other British renters. London rent for professionals is nearly four times more expensive than the average rent of £1,427 in other major UK cities. Rental growth in London has slowed down and its one reason driving tenants and residents away. Overall London is losing more people to the rest of Britain than its taking in. It suffered a net loss of 106,620 people to other parts of the UK in 2017 (225,690 people moved to the capital while 332,310 left). The net loss is over 50,000 more than it was in 2012.
Addressing High Housing Costs
Stephen Clarke is a senior economic analyst for the Resolution Foundation, a think tank for living standards. He said, “London needs to get a handle on its high housing costs if its ‘living standards exodus’ is to be stopped.” He suggests the number of new homes built needs to match the capital’s housing needs. The answer isn’t simply building more homes but a significant number of the new stock should be genuinely affordable, to rent and to buy. Otherwise families will struggle to raise their children in the city and look to settle down elsewhere.
Could Wages Be Higher?
London is home to some of the world’s highest paid occupations and Deutsche Bank’s list of the world’s cities where people earn the most puts London in 11th place worldwide for 2018. The average monthly salary is just shy of £2600 and Edinburgh is the only other UK city on the list of 28 in 22nd place. Would higher wages encourage more people to stay working and living in the city? Could the London Living Wage also be higher? It currently stands at £10.20 per hour for 2017/18 covering all boroughs of Greater London and is set to rise next year when its recalculated. The calculation is based on living costs and rent is the primary cost that causes the differential between the two rates but it also considers childcare, travel costs, food and household bills.
Landlords Providing the Best Spec
If people can get more value for money elsewhere then London properties need features and perks of their own. For tenants happier to rent who decline the hassle of buying they can often be relocated with little notice and need to move in fast, then out just as fast. These young professionals may prefer a totally furnished property on London’s rental market. Kitchens should be made to a high standard with gadgets and mod cons. Bathrooms should have power showers or good water pressure, wood floors are recommended in the city (no carpets in the kitchen or bathroom). High security is essential even with CCTV if possible, broadband and cables should be preinstalled providing instant access to a strong connection. A study space will be appreciated and a garden or some outside space is vital for families.
Listening to Londoners’ Needs
London boasts an unrivalled choice of attractions, opportunities and activities compared to the rest of the country. From the vast range of employment options in the capital, to its diverse cultural fashion, food and music scenes. However, people are being priced out and it simply isn’t viable for them to stay there. Some of these issues can be addressed by the property industry, City Hall and the Government to reduce the amount of Londoners choosing to move away.
Do you currently live in London or have lived there before? Contact us below and tell us what would make you stay in London rather than relocate.