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Property market: Soaring price of London homes makes long commute a little more attractive: Living an hour from work saves pounds 380,000 for buyers House in Wellingborough is price of a London garage

July 5, 2014

Hilary Osborne



London property prices are racing away from the rest of the country at such speed that an hour-long train journey to the office saves workers in the capital an average of pounds 380,000 on the price of a home.

Moving to one of 21 towns within an hour's commute of London can cut the cost of buying a property to an average of pounds 260,000, according to research by Lloyds Banking Group, compared with pounds 641,000 in London transport zones 1 and 2. That price difference more than offsets the typical pounds 5,000-a-year cost of a season ticket.

The most cost-effective commuter town is Wellingborough in Northamptonshire, where homes sell for an average of pounds 150,000 - the price of a studio flat on Holloway Road in north London or a garage in Knightsbridge. The town is 45 minutes from St Pancras at a cost of pounds 6,548 a year.

Researchers looked at Land Registry house prices to calculate the average cost of a home in towns with good train links to the capital, and then compared them with property values in central London (PDF).

They found that even a 30-minute commute can result in a big cash saving. The average cost of property in 16 towns in the half-hour commuter belt - including Reading, Luton and Hatfield - was pounds 283,000, or pounds 358,000 less than in central London.

When Lloyds last did the survey in the autumn of 2012, the savings from living an hour outside London were pounds 308,000, but since then London prices have accelerated rapidly. New data from Nationwide building society last week showed London prices have soared 26% in the past year.

Commuters travelling in from outside the capital also pay substantially less than Londoners living in zones 3-6, which include areas such as Ealing, Brent Cross, West Ham and Wimbledon. A half-hour train journey means an average home will cost 28% less - some pounds 110,000 - than the pounds 394,000 average in outer London.

Several years ago Wellingborough and surrounding towns resisted the local development agency's bid to rebrand it North Londonshire but local estate agent Jenny Pendered said she made the most of its good transport links when marketing properties. For pounds 150,000 in Wellingborough, she said, buyers could get a detached three-bedroom property or a semi-detached new-build. "Typically Victorian terraces go for between pounds 90,000 and pounds 125,000 depending on their condition - that's what you get near the station."

Andrew Wright, at another local estate agent, William H Brown, had recently shown a family moving from London around a four-bedroom house with a paddock, on sale for pounds 375,000. "Northamptonshire has a history as a shoemaking area. It's still cheap because it has a blue-collar rather than a blue-chip heritage."

Selling up in the capital to cash in on a Wellingborough bargain home, however, doesn't appeal to all. Another agent said the town "doesn't offer a lot in terms of glamour" and that prospective buyers often decide to live elsewhere.

However, Wright says investment is coming to the area, with the planned redevelopment of the station among improvements that might attract more people.

Kettering, Peterborough, Luton and Basildon are also in the top five most cost-effective towns within a 70-minute commute. In each of these towns the cost of an average home was less than pounds 174,000.

Marc Page, at Lloyds, said: "Quality of life is just as important a consideration for most and therefore trade-offs between type of property, schools, environment and time spent commuting all need to be weighed up carefully."

Captions:

Commuting for an hour by train into central London cost thousands per year, but makes the cost of buying a home much lower


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Source: Guardian (UK)


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