Fewer Londoners ventured outside the M25 in 2023 to buy a home elsewhere, according to an index.

Londoners collectively spent an estimated £28.7 billion on homes outside the capital this year, which was £11.7 billion less than in 2022, estate agent Hamptons found.

It highlighted two factors at play in the market – the first being fewer house sales taking place across Britain generally and the second being higher mortgage rates leading to many “London leavers” spending less on their new home than their previous property.

This year’s total was £20.1 billion lower than the £48.8 billion total spent moving out of London in 2021, when there was a spike amid the “race for space” seen during the coronavirus pandemic.

With fewer sales taking place generally across the market, the estimated number of homes bought by Londoners outside the capital fell to 69,190 in 2023, the lowest figure in nine years, since a total of 66,810 was recorded in 2014.

In 2021, the number of homes bought outside the capital by Londoners was put at 100,980.

More than three-quarters (77%) of home movers leaving London spent less on their new home outside the capital this year, jumping from 60% in 2022.

This releasing of equity has enabled some to pay cash for their new home, rather than borrowing. Of the households spending less on their new home, 81% are estimated to have bought without a mortgage, up from just 51% in 2022.

About four in 10 (41%) of those trading London for elsewhere moved to a home with fewer bedrooms, up from a low of 23% in 2020, when the race for space was in full swing.

First-time buyers also made up three in 10 (30%) Londoners buying outside the capital this year, up from 12% a decade ago, according to Hamptons.

On average, people moved 25.5 miles outside London to get on the property ladder this year.

Affordability pressures meant the average Londoner buying outside the capital spent £415,020 typically in 2023, £89,990 less than the £505,010 average spend last year.

Londoners still made up 7.7% of all buyers purchasing property outside the capital in 2023, up from 7.3% in 2022 and 6.8% in 2019, the report estimates.

However, the pace of London outmigration remains lower than when it peaked at a 15-year high of 7.8% in 2021.

Aneisha Beveridge, head of research at Hamptons, said: “With only around a million homes changing hands across Great Britain this year, fewer Londoners crossed the M25 in 2023.

“However, those that did tended to be downsizers or first-time buyers. Downsizers, tired of London life, are looking further afield to release cash and clear their remaining mortgage balance.

“Meanwhile, higher mortgage rates have reduced first-time buyers’ purchasing power, pushing them to search for more affordable homes further afield.

“With mortgage rates expected to continue falling in 2024, the affordability picture should improve. We expect this to slow the pace of London outmigration somewhat, as younger Londoners can increasingly afford to buy locally.

“Upsizers, who have sat tight in a subdued 2023 market, are likely to come back into the fold as it gets cheaper to borrow, meaning they’re likely to dominate those leaving the capital next year.”

Hamptons carried out the research using data from the Countrywide property services network, which spans across the UK and which Hamptons is part of.

Figures were scaled up to reflect the whole market using HM Revenue and Customs (HMRC) transactions data, making some assumptions for the number of home sales set to be completed in 2023.