London, for all its bright lights, is but a pit-stop.
The typical Londoner story goes like this: a wide-eyed graduate arriving on the train, job offer letter in hand, ready to work and party hard in the City. After slogging for a few years, he builds up a big enough savings pot – basically whatever is left after paying off his landlord – before leaving London and singlehood behind to buy his first home with his partner (whose story is roughly the same).
As an ex-wide eyed graduate who has followed a similar path, I was interested to find out if the data bore this out — is London really a pit stop for the young? I studied the latest internal migration statistics from the ONS (published last month) which documents migration into London for the year 2015.
The answer is yes:
In general, everyone is leaving London except for 20 – 29 year olds. Within this segment, the 20-24 year olds (27,960) outnumber their older counterparts (9,990) by almost three times — probably because that is the age for most university graduates.
The pattern is consistent over recent years from 2012, when internal migration data was first made available.
So where were the young’uns going to? I broke down the data by London borough:
Top boroughs: Lambeth, Wandsworth, and Hackney.
Bottom boroughs: Brent, Hillingdon, and Newham (although net migration in here became positive in 2015).
Useful infographic below, showing average net migration across the London boroughs from 2012 to 2015. It shows clearly that they prefer to stay close to the centre, even if it might be cheaper to rent further out:
So what does this mean for property buyers and investors? Young graduates are going to be the largest and most stable demographic in the London tenant pool, and buy-to-let investors / PRS institutions looking to target this demographic should pay attention to graduate salaries, and look for properties in the top three boroughs listed above which have been consistently popular.