Leaving the Capital? Why DFLs are Turning to Auctions to Move Out of London
Posted by Clive Emson Auctioneers on 18th May 2023 -
For many Londoners, the benefits and convenience of living in the City no longer outweigh the increasing list of cons. With the rising cost of living and astronomical property prices, London’s lure is starting to wane, but this presents an excellent opportunity for financially savvy ‘DFLs’ (Down from London) to cash out and purchase property in more affordable areas – with change to spare. In fact, since the pandemic, we’ve seen plenty of case studies and stories of young families moving out of London, paying off their mortgages and renting before they purchase a property within a commutable distance to London. ‘Down from London’ buyers are looking for regions that offer a better quality of life, schooling, commuting links and communities, with homes available for a fraction of the cost of a comparable residence in the capital – especially if you purchase via auction. Auctions are in high demand, where properties with good potential for refurbishment and great links to London present a way to secure generous living space in desirable cities, towns and rural areas. Let’s look at some of the metrics and average prices to demonstrate why moving out of London continues to be a growing trend – and the advantages to consider.Financial Benefits of Relocating Outside of London
While the Big Smoke is a vibrant, lively and diverse city to live in, the pandemic and remote working have incentivised thousands of Londoners to consider life elsewhere, with varied benefits, such as:
- Improved air quality
- Larger homes and outdoor spaces
- Friendly local communities
- Lower crime rates
- Greater affordability
The latter is one of the most significant drivers of the London exodus, particularly in an inflationary economy where the average property in London sells for £523,666 compared to £384,996 in the southeast and £343,900 in east England, according to the latest government figures.
Another impact of higher interest rates, affecting mortgage borrowing costs, means that London has the largest proportion of repossession sales anywhere in the UK, where families find that fixed incomes do not keep pace with rising homeownership costs.
Selling a property in London can allow homeowners to achieve an optimal sale value based on the highest market averages in the UK, buying a property of equal or greater size, often with surplus funding left over to use as they wish.
Long-Term Considerations When Moving Out of London
Property owners living in the capital can seize the chance to achieve higher living standards, and thousands have sold their residences at a premium price, reinvesting in spacious and comfortable family homes, with preferred regions including Kent, Sussex, Surrey, Dorset and the West Country.
This is because auctions enable prospective buyers to bid on homes with fantastic investment potential, many of which are easily affordable with the sale proceeds of a London home.
For example, selling a compact and modern London property for the average value would provide a healthy budget to invest in a substantial residence in Kent or Sussex with a surplus of at least £80,000, which buyers could use to add tangible value or refurbish a home to their tastes and preferences.
A four-bedroom home in London achieves an average of just over £1 million, depending on the borough, with similarly sized properties selling for £418,900 in Brighton and £411,340 in Oxford, representing an opportunity to live mortgage-free.
Refurbishing a property by modernising the floor plan, adding an extension, redecorating or upgrading the furnishings can add value, and given the contrast between property pricing inside and outside of London, commonly means having money remaining when all improvement works have been completed.
Relocating From London: A hypothetical case study
While every buyer should conduct their own research and calculations, there are several case studies that demonstrate the appeal of selling in London and buying a property for a competitive price at auction.
For example, say Bidder A contacted Clive Emson to express an interest in a property auction lot in the Medway area, securing a three-bedroom end-of-terrace property with a large garden in the highly sought-after town of Rochester for £180,000 (for example, this property here) – compared to an average sale price of £369,000 in the region.
An online overview of the floorplans demonstrated considerable room to renovate and improve the condition of the interior and exterior, with a highly competitive reserve price owing to the works required for the structure of the building.
Say the bidder sold their two-bedroom flat in Battersea for £995,000, repaying the entirety of their mortgage debt of roughly £590,000 and purchasing the investment property with £225,000 cash remaining.
As a family of three, the buyer rented nearby accommodation in Medway while renovation works were completed, costing a total of £125,000, including rental costs, landscaping, refurbishing the full interior and exterior, and restoring period features.
Once complete, the property was revalued at £360,000, while the buyer could have retained £100,000 in cash funds for future use.
Remember that Rochester is a short commute to London – just 36 minutes on the high speed network. This is a very real prospect for those looking to purchase property at auction and capitalise on the sky high prices of London property.
Demand for Properties Outside of London
While the pandemic was a catalyst that prompted many homeowners to consider a relocation outside of London, the trend has continued unabated in the months and years since. For many, space is a priority, where homes in less congested cities and towns provide ample room for growing families without a comparably high price tag.
Coastal locations are in particularly high demand, with experts predicting that the London population is set to drop for the first time in 35 years by as many as 300,000 people. The statistics indicate that:
- The average ‘down from London’ buyer is in their 30s or 40s, with a smaller proportion relocating in retirement.
- The most common reasons for leaving are cited as congestion, costs and commuting, with the average Londoner paying around £2,500 a year in TFL travel costs.
The growing ability to work from home or choose a hybrid working approach with a limited number of days physically present in a London office has made this more viable for many.
The commuter belt has long been popular, but changes to the working dynamic have driven interest in East Sussex, the southwest and semi-rural regions around Surrey, Kent, Hampshire and Berkshire.
Salaries in London are, on average, £41,866 a year, compared to £33,000 across the whole of the UK, but the option of retaining a career based in London, or working for a London company, provides a perfect balance of income vs outgoings while enjoying the space and lower cost of living elsewhere.
Buying a Property at Auction
For those currently living in London and considering a move, there are various important considerations, not least the type of area you wish to live in, how much you would like to spend, and selecting properties with a strong likelihood of providing a return on investment.
There are two primary options:
- Buying an auction property in need of refurbishment or modernisation and adding your own stamp, aesthetic and finish to suit the specific needs and aspirations of you and your family.
- Purchasing property at auction as an investment, either as a primary residence, rental property, or both and using the rental yields as a secondary passive income.
Selecting the right properties to bid on will depend on your objectives, but you can browse auction lots, including video tours, with advance details available to compare before the auction begins.
Auction particulars detail much of the necessary information, and a legal pack is also useful to ensure you can review the guide price, property condition, and location and begin to draw up plans.
If you have already sold your London property, you can proceed as a cash buyer; you should also set an upper limit beforehand to ensure you place bids that are consistent with your budget and calculations since a tempting auction property often invites competitive bids.
Alternatively, some financing providers offer other solutions, such as bridging loans, with a pre-agreed maximum value, allowing you to move ahead with an auction purchase while pending a sale of your London home.
Note that deposits of 10% are payable on the day, and the balance normally falls due within 20 working days, so you must be prepared to move quickly once you have entered a successful bid on your selected property.
Living Cost Considerations
Finally, it is wise to evaluate your broader plans, such as work, school, travel and other financial commitments, to ensure your relocation outside of London is a success. Life outside of the capital is often vastly more affordable, making it a streamlined and comfortable transition.
The table below indicates how the average outgoings of a person living outside of London compare, based on some of the favoured destinations elsewhere, showing how a better quality of life is achievable on the same income.
| Brighton | Tunbridge Wells | Colchester | Southampton | |
| Consumer prices | -20.3% | -24.5% | -25.2% | -22.6% |
| Rental prices | -57.3% | -45.3% | -60% | -58.8% |
| Restaurant prices | -24.1% | -27% | -8.9% | -29.7% |
| Grocery prices | -7.4% | -15% | -22% | -16.3% |
Prospective buyers should also factor in the costs of relocating, putting furniture into storage, stamp duty, and other outgoings associated with selling their London property – but in many cases, stand to make meaningful savings not just on the price of their home but on their long-term financial costs and living standards.
For more information about buying a property at auction with good improvement potential or to browse current lots and upcoming auctions, please contact us at Clive Emson. If you’re interested in selling your property at auction – see our guide here.
Our skilled auctioneers can offer assistance at any stage, and we can provide help with achieving an expedited sale on your London residence if you wish to relocate quickly.
References:
- https://www.gov.uk/government/news/uk-house-price-index-for-march-2022
- https://www.rightmove.co.uk/house-prices-in-Kent.html
- https://www.affirmativefinance.co.uk/blog/average-prices-of-uk-family-homes-revealed/
- https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=United+Kingdom&country2=United+Kingdom&city1=London&city2=Colchester
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Clive Emson Auctioneers
Clive Emson Auctioneers was founded in 1989 to supply a high profile auctioneering facility to corporate and independent estate agents, private clients and statutory bodies. Purchase or Sell land and property with one of the UKs leading property auctioneers.
