London workers who are prepared to commute up to an hour into work could save nearly £450,000 (60%) on the cost of a house, new research has found.
A study, carried out by Lloyds Bank, has found that average house prices drop by 60% from £741,919 in central London to £294,903 in commuter towns an hour outside of London, such as Wellingborough, Southend, Sittingbourne and Rugby.
This equates to an average saving of £447,015 (or 60%) in house prices.
Even though transport expenses rise with a longer commute, at an average cost of £5,000 for a rail card, a commuter would need to make the journey for 89 years to cancel out the saving.
Commuters who want to live closer to London, in areas such as Hatfield, Billericay, Orpington and Reading, could still make serious savings. The average house price in these areas stands at £389,000, making them 48% cheaper (£353,000) than central London and with a lower than average annual rail pass costing £3,500.
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.”
However, the trend does not continue nationwide. In Manchester and Birmingham, for example, Lloyds Bank found that it was cheaper to live in the city than outside it.
In Birmingham the average house price is £172,000, whereas the average house price in towns such as Derby, Coventry, Burton on Trent and Leamington Spa, which are a 40 minute rail journey away, are around £211,661.
Lloyds Bank research found the same to be true in Manchester. Surrounding towns, such as Warrington, Chorley and Macclesfield all command higher house prices of around £204,161, when compared to Britain’s third largest city (£162,214).
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27th September 2016