Right. Let's talk about something that nobody in Westminster wants to discuss at the dinner table, mainly because half of them are probably planning to leave as well.
Britain, it turns out, is haemorrhaging people at a rather alarming rate. Not foreigners – although plenty of them are off too – but actual, born-and-bred, tea-drinking, queue-loving Britons. According to the Office for National Statistics, in the year to June 2025, around 252,000 British nationals left the UK on a long-term basis. Net emigration of British citizens stood at approximately 109,000 for that same period. And here's the kicker: a staggering 76% of all British emigrants are now under 35, according to analysis from the Migration Observatory at Oxford University.
Yes. We are exporting our young people. The ones who would, in a normal functioning country, be buying their first home, taking out a mortgage, and arguing with their partner about whether to get an open-plan kitchen.
The Great Gen Z Escape
In the year to June 2025, departures among Britons aged 20–29 hit somewhere between 130,000 and 140,000 – up from around 92,000 to 95,000 before the pandemic. These are not gap year students with a backpack and a naive enthusiasm for hostels in Bangkok. These are young professionals who have sat down, done the maths, and concluded that Britain is not the place to build a life.
Why? Well, have you been to Britain lately? The weather is, as ever, absolutely appalling. The tax burden is near historical highs. And a new paper from Assaf Razin of Tel Aviv University finds convincing evidence that "democratic decline tends to increase emigration." Make of that what you will -and given recent polling showing declining faith in British democracy, it doesn't exactly scream "stay and buy a semi in Swindon."
The Economist, in a wide-ranging analysis of emigration across 31 Western nations, puts the global trend in sharp context. Across the West, around 4 million people left their home countries in 2024, about 20% more than before the pandemic. The UK fits neatly into that pattern – a country where the top 1% now pay an effective income tax rate of about 40%, up from less than 35% in the early 2000s, where politics is widely perceived to be broken, and where the weather has never, in recorded human history, been described as "lovely."
The Henley Private Wealth Migration Report estimated that some 16,500 millionaires were expected to leave the UK in 2025 alone – potentially the largest wealth outflow of any country in the world. These are not people renting a studio flat in Elephant and Castle. These are people who own the sort of houses that make a mortgage broker weep with envy.
British nationals leaving the UK vs returning, 2021–2025
Annual emigration of UK nationals has remained broadly flat — but fewer are returning, widening the net outflow.
Sources: ONS Long-Term International Migration Statistics (Nov 2025); House of Commons Library; Full Fact. Chart: MortgagePro UK.
So what does this mean for the housing market?
Here's where it gets genuinely interesting for anyone in the mortgage business.
The UK housing market in 2025 and into 2026 has, frankly, been about as exciting as a half-eaten Rich Tea biscuit. According to the UK House Price Index, prices increased by just 1.3% in the year to January 2026. In London and the South East – the very places where your average departing young professional is most likely to have been renting -prices actually fell. London dropped 1.8% in 2025. East Anglia and the South West saw some of the sharpest declines.
RICS data from August 2025 showed new buyer enquiries falling for the second consecutive month, at a net balance of -17%. Agreed sales slipped to a net balance of -24%. Mortgage approvals for house purchases came in at 62,584 in February 2026, down from 65,114 in the same month a year before. The market is, in the language of people who understand these things, "soft.”
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Now, the usual suspects are being dragged out to explain this: the stamp duty deadline distortions of early 2025, elevated mortgage rates hovering above 5% for many products, affordability pressures, a jittery post-Budget market. All valid. All real. The RICS itself noted that "concerns over the wider economic and fiscal outlook, combined with questions around the future path of interest rates amid stubbornly high inflation, are weighing on sentiment."
But here's the thing nobody is quite saying loudly enough: demand is also being quietly eroded by people leaving.
Think about it. Every young professional who packs up their laptop and relocates to Amsterdam, Sydney, or – God help them – Toronto, is one fewer first-time buyer. One fewer person absorbing a chain. One fewer mortgage application landing on your desk. The Cushman & Wakefield residential forecast notes that demand cooling is partly driven by a "decline in net migration" and "affordability pressures that led to more young adults living with parents." The first part of that sentence is doing a lot of heavy lifting.
But wait – isn’t immigration filling the gap?
This is the argument that deserves a good prod with a sharp stick.
Yes, the UK is still seeing significant net migration -204,000 in net terms for the year to June 2025. Population pressure, we're told, continues to support housing demand. And structurally, that's true. The UK builds somewhere between 200,000 and 230,000 homes a year against an estimated need of 300,000. That gap is real and it does support prices over the long run.
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But -and this is a substantial but, the kind that requires its own paragraph -the nature of who is arriving versus who is departing matters enormously to the mortgage market. The young British professionals leaving for sunnier, lower-taxed, more optimistic horizons are precisely the demographic that drives first-time buyer activity, remortgage volumes, and housing chain mobility. The people arriving, while valuable contributors to the broader economy, are disproportionately recent arrivals on lower incomes or in transitional visa situations -not yet in a position to be buying a three-bed in Basingstoke.
British nationals leaving the UK vs returning, 2021–2025
Annual emigration of UK nationals has remained broadly flat — but fewer are returning, widening the net outflow.
Sources: ONS Long-Term International Migration Statistics (Nov 2025); House of Commons Library; Full Fact. Chart: MortgagePro UK.
There is also the question of wealth. Those departing millionaires are, by definition, sellers rather than future buyers. When a high-net-worth individual decides that Keir Starmer's Britain isn't quite the environment for their capital, they list the house and leave. That adds supply in the premium and prime markets at precisely the moment demand from that cohort is shrinking.
The long game
Now, before anyone writes in to suggest I am predicting Armageddon, let me be clear: I am not. But I would also caution against reaching for the champagne, because the interest rate picture has just got considerably more complicated.
At the start of 2026, the received wisdom was that the Bank of England would cut rates twice this year, mortgage costs would drift gently downward, and the market would enjoy a decent recovery. Then a war broke out in the Middle East, oil prices spiked, and the Bank of England unanimously voted to hold the base rate at 3.75% in March 2026. Some economists are now forecasting not cuts, but hikes -potentially taking the base rate back up to 4.25% before the year is out. Average 5-year fixed mortgage rates have climbed to 5.54% and 2-year fixes to 5.56%. A typical mortgage is already around £85 a month more expensive than it was before the Iran conflict began.
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Housebuilding starts in England were up 24% year-on-year in Q4 2025, which is genuinely good news. And for many regions -the North West, Yorkshire, Northern Ireland, Scotland -the market looks rather more robust than the London-centric doom suggests. House prices in these areas are growing faster than the national average, and buyers there tend to be less affected by the premium-end exodus.
But the structural question remains. The UK is losing its most economically productive young people at record rates, and it is not yet clear that this will simply be absorbed by the population numbers. As The Economist bluntly puts it in its analysis: "When a state invests in educating young people only to lose them, it forfeits future tax revenues." It also, one might add, forfeits future mortgage applications.
The housing market is not about to collapse. But if you are wondering why transaction volumes are stuck around 100,000 a month rather than racing ahead, why first-time buyer activity remains stubbornly below where it should be, and why demand in London and the South East continues to disappoint -well, some of the answer is standing in an airport departure lounge, passport in hand, off to somewhere with cheaper taxes, better weather, and a functioning political system.
For mortgage professionals, the message is not panic. It is, however, a reminder that demand is not simply a function of population size. It is a function of aspiration, confidence, and the belief that putting down roots in Britain is worth it. Right now, for a worrying number of Britons, that belief is packing its bags.
