City homes located in close proximity to a train or tube station are always going to attract a premium. But in some areas these prime locations could add as much as £42k to a property price.
This is according to a new study by Nationwide which has investigated the value buyers and renters placed on being close to rail, tube or tram links.
The research focussed on London, Manchester and Glasgow and it found, in all these major cities, transport links remained most important to those living in these areas.
But, in London, properties within 500m of the nearest station benefited from a premium of £42,700 compared with a similar property 1,500m away
In Greater Manchester there was a £10,900 premium and it was £8,800 in Glasgow.
Andrew Harvey, senior economist at Nationwide, said: “Our recent market research confirms that transport links remain important to those living in major cities, with over 80% of Londoners saying being near a station was either ‘fairly important’ or ‘very important’ when choosing to buy or rent their current property.”
Harvey revealed in Glasgow and Manchester, around 60% of respondents stated being near a station was either ‘fairly’ or ‘very important’.
He thinks this is likely to reflect the fact those living in London typically used their local station more often, with nearly 60% using either rail or tube more than once a week. This compares with 37% in Glasgow (for rail and subway) and 35% in Manchester (for rail and Metrolink).
In London, the survey found, commuters tend to have slightly longer journeys, with an average commute time of nearly 30 minutes by tube or train. This is around five minutes longer than those in Glasgow and Manchester.
As many as 15% of London commutes were over 45 minutes however, compared with 9% in Glasgow and Manchester.
Nationwide also asked survey respondents how much more they would pay to live in an area with good transport links compared to an area with poor links.
It found, on average, respondents were willing to pay 8% more, although there is a significant spread of opinion, with nearly 30% of those in London willing to pay more than 10% extra to live in an area with good transport links.
Harvey said: “London homebuyers continue to be willing to pay a significant premium for being close to a station compared with those in Glasgow and Manchester.
“This is consistent with our market research findings and likely reflects the greater reliance on public transport in the capital.”
He added: “Our research indicates that London homebuyers continue to pay a significant premium to be close to a station.”
A property located 1,000m away, Nationwide discovered, commands a 3.5% premium, at 750m this increases to 5.6%, while a property 500m from a station attracts an 8.0% premium (approximately £42,700 based on average prices in London) over an otherwise identical property 1,500m from a station.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “The pandemic accelerated trends which were starting to happen anyway and the increase in working from home certainly made a difference to where people chose to buy and rent for quite a long time.
“However, that trend is slowly starting to reverse as people return to work – not quite to the levels before Covid but certainly approaching. These figures reflect that trend to some extent although of course the cost of property and transport are other factors.
“In larger cities buyers and tenants have to travel quite a way to find value for money which has a knock-on effect on their distance and convenience to place of work. However, with car driving proving to be more restrictive in built-up urban areas, good public transport links remain a must.”
