People living in London could save themselves a staggering £450,000 on the cost of a home if they are willing to live outside of the city and commute daily for an hour each way.
Average house prices drop by 60% from £741,919 in central London to £294,903 in commuter towns such as Wellingborough, Southend, Sittingbourne and Rugby just an hour outside of the capital, according to research by Lloyds Bank.
Even when taking into account the annual rail cost for a one hour daily commute each way (£4,989), a commuter would have to make the same journey for 89 years for the total rail costs to wipe out the benefit in house prices.
The most affordable commuter town for London is Wellingborough in Northamptonshire, where the average house price (£183,345) is 4.1 times the average annual earnings for zones one and two (£44,967).
For commuters to Britain’s second and third largest cities, Birmingham and Manchester, house prices are often higher outside the city.
The average house price in Birmingham is around £172,000, but several towns around 40 minutes rail journey away – including Derby, Coventry, Burton on Trent and Leamington Spa – command higher average house prices of £211,661. Commuters from these towns also have to pay almost £2,221 on average for an annual rail pass.
Andrew Mason, Lloyds Bank mortgage products director, said: “Commuters to London who don’t mind a longer journey between home and work could reap the financial benefits of living outside of the capital.
“However the decision of whether to live in the city or further away is not simply a trade-off between financial costs and journey times. Quality of life is also a major factor. Family circumstances, better schools, physical environment and homes that offer better value for money also come into the equation. That explains why, especially outside London, commuters are often prepared to pay a premium to commute when they could be better off in purely financial terms living closer to their place of work.”
