Rail commuters to London are benefitting from house prices that are 60 per cent lower by catching the train rather than living close to their place of work, according to new research by Halifax.
House prices an hour outside of London are on average £375,000 (60 per cent) lower than in the centre of the city, more than offsetting the average £4,400 annual cost of a sixty minute commute to the capital.
Towns an hour’s commute from central London, which includes Peterborough, Manningtree, Swindon and Rochester, equate to an average property price of £245,000: a significant contrast to the average of £620,000 for a property in the centre of the capital. In comparison, the average annual rail cost of £4,400 from these areas in the ‘one hour zone’ is relatively small.
Half an hour closer and house prices begin to creep up, but not substantially. Commuters from towns in the ‘half hour zone’, approximately 30 minutes away from central London, including Chelmsford, Milton Keynes, Reading and Sevenoaks, will have to pay an average house price of £375,000: still some £345,000 lower than central London and with a less significant average annual rail pass cost at £3,100.
Even at fifteen minutes distance away from the heart of the capital, commuters from towns such as Watford and Bromley benefit from an average house price that is nearly £300,000 lower than in central London.
Where it pays to live in the city
Commuters to some of the UK’s major cities, however, are paying more than if they lived in the city.
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 £150,000, but several towns around 30 minutes rail journey away – including Walsall, Wolverhampton, Coventry, Burton on Trent and Leamington Spa – command higher average house prices of around £160,000. Commuters from these towns also have to pay almost £1,500 for an annual rail pass. The same applies to a number of towns that are approximately 30 minutes away from Manchester, such as Warrington, Chorley, Huddersfield and Macclesfield, which also have a higher house price (£175,000) than in Britain’s third largest city.
Though examples are rare, some commuters to central London also live in areas that command higher average house prices: commuters to London from Beaconsfield, for example, pay a higher average house price than central London (£757,097) while also having to cover the cost of an annual rail cost of £2,972.
Nitesh Patel, housing economist at Halifax, commented:
“It’s no surprise, for London at least, that longer your commute, the larger the difference in house prices. Commuters to London tend to get a lot more for their money than in central London; bigger houses for lower prices.
“Nonetheless, the decision to commute is not simply a trade-off between financial costs and journey times. Quality of life is also important: family circumstances, better schools, physical environment and homes that offer better value for money also come into the equation. This 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.”
