When Kat Park, 33, found her two-bedroom flat in Haggerston in 2021 she thought it was her dream home. It had two balconies, a view across east London and she loved the area. But in October last year, her landlord put the rent up by £600 a month, to £2,800. “It just became completely unaffordable for us,” she says. “I work in PR and my boyfriend, Charlie, works in advertising and we earn good money, but if you want to have a nice life here and also save a bit to buy a house one day, living in London feels completely unaffordable right now.”
In what’s becoming a familiar tale, the couple moved to Bristol and bought a four-bedroom house with a garden. Their mortgage repayments are far less than their rent used to be.
“I never thought I’d leave London but I really noticed a shift after the pandemic,” says Poole, who found a new job in Bristol, while Charlie works remotely. “It feels like the city changed a lot. There were less people about, life just seemed a bit harder. I felt really sorry for my younger colleagues who had just moved to the city and were trying to find a flat and afford to do fun things.”
The couple are part of a mass exodus from the capital, as record numbers of people decide they’re not tired of life, just tired of London house prices. In 2022, 40 per cent of London renters — over 90,000 people — chose to say goodbye to The Big Smoke, the largest number in 10 years. Homeowners were not far behind, with more than 62,000 opting to sell up and move away.
If you want to have a nice life here and also save a bit for a house, living in London feels unaffordable right now
“We don’t have real-time figures for people leaving London in 2023 yet, but anecdotally I’d say they are going to be higher,” says Jon Tabbush, a senior researcher at the think tank Centre For London. “There are many reasons behind this — the rise of hybrid working is a big one — but the huge increase in rents and mortgage repayments is a big driver. We know that London renters are the most likely to have received a rent increase this year, the average rise being 12 per cent, and there just aren’t as many rental properties about. Savills reported a 41 per cent reduction in the number of private homes available for rent in 2022, and local housing benefit used to cover 19 per cent of properties in London, now it’s just 2.3 per cent because that benefit has frozen and hasn’t risen in line with inflation.”
For the past decade, there’s been a well-worn path for thirty-something Londoners with small children to move to outer boroughs. And the number of 30 to 39-year-olds leaving the capital has risen year on year since 2012 — but Tabbush says that trend has accelerated. “We’re now seeing more single people and couples who don’t have kids leaving, or people who left for the outer boroughs and are now going even further away.” And there aren’t as many younger people coming to replace them. In 2020, London went into “negative net flow”, which means more people leaving than arriving. The 20 to 29 age group saw the largest fall in net migration.
Billy, a 25-year-old writer, has moved to Manchester after struggling to find an affordable room to rent in the capital. “Often I couldn’t even get an appointment to view a room, but if I did I’d get outbid as people were offering hundreds of pounds over the asking price,” he says. “Even a small room in a depressing houseshare was over £1,000 which is way more than I had budgeted for. Eventually I got tired of looking further and further outside the areas I wanted to live in, so I thought I’d be better off trying a different city instead.”
But it’s not just renters being priced out. Steven, a 33-year-old teacher living in Hither Green, says his mortgage repayments make owning a home here increasingly unaffordable. “My five-year fixed rate mortgage ran out last year and now my mortgage has gone up by nearly £1,000 a month,” he says. “I’ve taken a lodger into my spare room which helps, so at the moment I’m surviving, but when bills go up this winter I think I’ll be forced to sell up or rent the whole place out.”
According to research from estate agent Hamptons, most people leaving London went to counties such as Kent, Essex, Hertfordshire and Surrey. But some go further afield. Zoë Lind van’t Hof, 34, moved from Notting Hill to Mallorca in November 2020 with her partner Tom. “We were spending so much of our income on rent for our two-bedroom flat, and to enjoy your free time in a city usually involves spending quite a bit of money too,” she says. “Now we pay a lot less to rent a three-bedroom house in the mountains and spend our weekends hiking or swimming for free. It’s made a massive difference to our bank balance, and our quality of life.”
What does it mean for the future of London that so many people are upping sticks? “People leaving in these numbers has a huge impact on the dynamic of the city,” says Tabbush. “When families with young children leave, you see closures of schools and nurseries and we’ve seen that this year in places like Hackney and Southwark.”
It’s also leading to a more segregated city. “London used to be famed for its cheek by jowl housing — take places such as Islington or Notting Hill — where you’d have some of the most expensive properties in the country next to the most deprived housing estates,” he adds. “And that created a real diversity which was important culturally — think of the way London punches way above its weight in music, art, fashion and so on. It also leads to more social mobility. Research has found that if you go to school with people from a higher income bracket or socialise with them, then you’re more likely to go on to earn more too.”
Losing the energy of young people or those who work in the creative industries might also affect the dynamic of the city. Amy Bannerman, a 42-year-old stylist, recently sold her flat in Leytonstone to move to Hastings with her son, Alfie, two. “I was working from my bedroom so I really needed more space and the only way I could afford that was to move out,” she says. “I had been worried that I wouldn’t find that creative energy outside of London, but in fact it’s the opposite. There’s such a community of artists here, I’ve already had messages from people saying ‘Oh I’m a set designer, I’m an illustrator, I can’t wait to meet you’.” And even if you’re wealthy enough — or lucky enough — not to be affected by rising rents or mortgages, you’ll still notice the change. “This will have a negative impact on all of us,” says Tabbush. “Rising housing costs mean London can’t attract key workers. We already have the worst shortage of nurses in the UK… It’s affecting paramedics, doctors, teachers, construction workers. It doesn’t matter how wealthy you are, you’re not insulated from this if the social infrastructure falls away.”
So what can be done to encourage people to stay? “We need to get rid of the Right To Buy scheme,” says Tabbush. “The waiting list for social housing is about 300,000 people which is roughly the same number of homes sold under this scheme, 40 per cent of which ended up on the private rental market.
“We also need to build more affordable homes, particularly near transport links. TfL should be supported to do this, not blocked, like Grant Schapps did with the affordable housing that was proposed near Cockfosters station.”
I love the scale of London and I miss that. I also miss my friends, but a lot of them are thinking of leaving too
Although we’re unlikely to see as many repossessions as we did after the 2008 crash — thanks to fewer interest-only mortgages and more mortgage stress tests— Tabbush says that lots of home-owning Londoners could be in “severe pain” in the coming months.
“I’m particularly worried about homeowners who bought under the Shared Ownership scheme or took out a Help To Buy loan as they’re seeing their monthly mortgage payments skyrocket and they could soon be in negative equity — when the value of their home falls below the cost of their loan.”
Suggestions for helping mortgage-holders include allowing a break from payments, making payments interest-only, or selling off stakes in the property to private companies. But in June, Rishi Sunak ruled out offering any extra support to UK homeowners.
Kat Park says that although she’s loving her new life in Bristol there are things she misses about the capital. “I love the scale of it — you can feel like you’re in six different places in one day sometimes. I also miss my friends,” she adds. “But a lot of them are thinking about leaving London too.”
