Londoners are leaving the British capital because they can no longer afford the property prices, analysts have revealed.
According to website Smart New Homes, London's first-time buyers and movers on moderate to low incomes are buying in the home counties and East Anglia, within commuter distance to work.
Prices for new homes in the capital have risen 9.8 per cent over the past 12 months, way in excess of the 1.3 per cent rise nationally, the website's research shows. In many other regions of Britain, such as Wales, prices are falling. The average price of a new home in the capital has risen to GBP397,583 ($5.62 million), almost double the national average of GBP217,000, Smart New Homes has found.
Strong demand for luxury homes from overseas buyers and City of London workers has caused prices to rise throughout London's residential sales market.
'The high demand for properties in London has resulted in buyers at the top end of the market offering maximum prices, often over the asking price to secure the property they desire,' said David Bexon, managing director of SmartNewHomes.com. 'Consequently, it appears that buyers further down the property ladder are being forced to sacrifice a city home and move to within commutable distances.'
Figures from Knight Frank show overseas buyers bought half of London homes priced at GBP2 million or more that were sold during the 12 months to last month. Research from Smart New Homes indicates financial service workers have been spending their bonuses on expensive flats.