Will London’s Exodus of Thirtysomethings Help or Hurt The Suburbs?
The housing group, Generation Rent, published some statistics this week that the number of people in their 30s moving out of London in 2014-2015 was a staggering 48% higher than in 2011-2012.
Rising house prices and rents in this period, 37% and 10% respectively, will naturally be blamed for this exodus, with the prevailing theory being that thirtysomethings are fed up with high housing costs and having their heads turned by what kind of property is available elsewhere. Frankly, this information isn’t taking anyone by surprise, with UBS rating London the second most overvalued city in the world on its ‘Bubble Index’ it is no wonder that many hardworking professionals in their 30’s are choosing to take their money outside of the capital. However, it seems they don’t want to flee too far, Generation Rent reported that of the 65,890 individuals who left London, two thirds moved to other areas in the South East and within commuting distance.
With transaction rates in the capital avoiding any huge hit as a result of this exodus, it seems like the influx of investment from elsewhere means that London’s property market will continue to stand strong, but the interesting effect of thirtysomething migration will be on the areas in which choose to settle.
House prices within London’s commuter belt were already reported up 9.6% in the third quarter of this year and show minimal signs of being affected by Brexit. As London’s high earning professionals look outside of the capital to buy homes, will this make prices inaccessible to locals? Will we see a gentrification process spreading further from the capital and affecting leafy suburban towns as well as grittier inner city boroughs? It certainly seems that the looming completion of infrastructure projects such as Crossrail will serve only to exacerbate this isse.
The coming years will certainly be an interesting study as to how far homeowners can be pushed by the so called ‘Champagne Waterfall’ effect of London’s sky rocketing house prices.