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Londoners are now snapping up property outside the capital

Londoners have bought £30bn of property in other parts of the UK over the past year as record numbers of locals leave the capital, new figures show.

The amount spent on new homes elsewhere by the capital’s residents reached a 10-year high in 2018, according to estate agents Hamptons International.

The figures suggest Londoners may be seeking better value for money or quality of life in other parts of the UK, swapping the capital’s overheated property market for cheaper areas.

London residents do not appear keen to stray too far, with the data suggesting 7 in 10 bought their next properties in the south-east and east of England.

But the number of Londoners heading to the Midlands or northern England has also gradually increased, from just one in 14 who left the capital in 2008 to one in five today.

Yahoo Finance UK previously reported how the north-west had the highest rise in property prices last year at 4.9%, followed by Yorkshire and the Humber at 4.4%.

The British cities with the fastest-growing markets in 2018 were Newport, Glasgow, Edinburgh and Manchester.

Official figures released earlier this year showed record numbers of Londoners were deserting the capital, with the exodus most pronounced among people in their 30s and 40s with children.

More than 330,000 London left the city in the year up to June 2017, with Newham in east London recording the greatest outflows of any London borough.

So many Londoners have moved to or bought second homes in regions like Cornwall and several towns on the southern coast that they are known as Down from Londoners or DFLs, with some locals resenting the impact on property prices.

The latest Hamptons International report shows the amount spent by the average London buyer outside the capital rose in 2018 to just under £399,000.

Aneisha Beveridge, head of research at Hamptons International, said: “Historically most people moving out of London have done so because of changing priorities, such as starting a family or generally wanting a slower pace of life.

“But increasingly as affordability in the capital is stretched, more households are looking beyond the confines of London to buy their first home.”

But she said the 2018 figures were probably a peak, with a slower housing market expected to push down purchases in the year ahead.

The property market has already begun to cool in London, with the latest official statistics showing prices were down 1.7% in October on a year earlier.

Homes are now cheaper in the capital than they were two years ago, with an average purchase price of £473,600.

But the city’s average prices remain incredibly high, with the average London home still costing £206,000 more than a decade ago – a steep rise of 77%.

Source: Yahoo Finance UK

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Londoners pay four times more stamp duty than the rest of the country

Buyers in London are paying at least four times more stamp duty than the rest of the country at £27,232, an analysis by London Central Portfolio found.

Basic rate stamp duty paid by buyers in England and Wales, however, stands at £7,161 on average.

The most expensive 10% of properties contributed around 60% of all stamp duty receipt with greater London being the biggest contributor to stamp duty at about 39%.

Naomi Heaton, chief executive of London Central Portfolio, said: “Despite the continued rumble around whether the richest are paying their ‘fair share’, it is clear that they are the main contributor to stamp duty revenue.

“LCP’s findings indicate that the majority of the Exchequer’s £9.5bn tax take is being generated by the 10% most expensive sales and that buyers in London are paying 4 times more Stamp Duty than the national average.

“The government also needs to be careful with any further policies targeting landlords. Contributing a huge amount towards the Exchequer’s tax take, landlords have been under increased public and government pressure over the last five years.”

The Royal Borough of Kensington and Chelsea and the City of Westminster contributed in excess of £0.6bn.

The most expensive sale alone, at £90m for a leasehold flat in Knightsbridge Apartments, generated over £10m for the Exchequer.

As a whole, residential stamp duty receipts increased 1.3bn in 2017 compared with 2016, reaching a record £9.5bn.

However, this was largely a result of the new 3% additional rate stamp duty on buy-to-let property and second homes.

This tax alone generated one fifth of all receipts and excluding it, the stamp duty take falls back to 2014 levels at around £7.5bn. Overall, 43% of the tax take, at £4.1bn, was generated by buy-to-let investors and second home buyers.

Heaton added: “New lettings listings are now down 5% to February, according to a recent Knight Frank report.

“Reliance on the stamp duty take from second properties, which pay an additional rate of 3%, to prop up the market is therefore a dangerous gamble. Representing almost half of all tax take, any new deterrent could start eating away at the public purse”.

“Unless the government can start to stimulate property transactions again, which according to Land Registry have fallen 29% in England and Wales over the last decade, the outlook for future Stamp Duty revenues looks fairly grim.”

Source: Mortgage Introducer