Rail commuters to London are now seeing large financial benefits by catching the train, rather than living close to their place of work, according to the latest research by Lloyds Bank.
Homebuyers can get more for their money outside central London due to the lower price of property per square metre, and the further the commute, the greater the benefit.
Many commuters in the South East may make a 60 minute train journey – with an average annual rail cost of close to £5,000 – but they benefit from a house price that is, on average, £380,000 (59%) lower than living close to their place of work in central London (zones 1 and 2).
House prices in a selection of towns about an hour’s train journey away from the capital (including Crawley, Windsor, Brighton, Rochester, Peterborough and Oxford) are, on average, around £260,000; that is £380,000 lower than the average of £641,000 for a property in an area within travelcard zones 1 and 2. This is also a significant £134,000 lower than the average property price in zones 3 to 6.
In comparison, the average annual rail cost from these areas is £4,996, which means a commuter would need to commute for 76 years for the total rail costs to wipe out the difference in house prices.
Half an hour closer and house prices are higher, but not substantially so. Commuters from towns in the ‘half hour zone’ will have to pay an average house price of £283,000: still some £358,000 (or 56%) lower than in zones 1 and 2. These also come with a lower average annual rail pass cost of £3,719. Such towns include Beaconsfield, Woking, Hemel Hempstead, Stevenage, Brentwood and Luton.
There is also a significant difference in property values in commuter towns surrounding London compared to the average house price in zones 3 to 6 of £394,000. Commuters in towns 30 minutes away have an average house price that is over £110,000 lower than the average in zones 3 to 6.
Even commuters whose journey is just 15 minutes from central London, such as those living in Borehamwood or East Croydon, benefit from an average house price that is significantly lower (nearly £276,000) than in the central zones of the capital. The average cost of an annual rail fare in these areas reduces to £1,986, nearly 50% lower than the average cost for a thirty minute commute.
Marc Page, Lloyds Bank Mortgages Director said:
“It’s no surprise, for London at least, that the further you commute, the more you save financially – even after travelling costs. However, 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.”