Londoners who are prepared to commute for two hours a day could save themselves £450,000 because of the much cheaper property prices outside of the city, according to new research from Lloyds Bank. The study showed that the price of property drops by 60%, from an average of £741,919 in central London to £294,903 in commuter towns located around an hour from the city.
Wellingborough, in Northamptonshire, was found to be the most affordable commuter town. The average price of a home in the town was £183,345. That’s a house price to earnings ratio of 4.1 for those working in London travel zones 1 and 2 and earning £44,967. The town has excellent train links to London St Pancras and a journey takes 52 minutes.
The second most affordable town according to the study was Peterborough. The journey time from Peterborough to King’s Cross is just under an hour. The town had house prices that were 4.2 times the average wage for London travel zones 1 and 2. Kettering (4.3), Chatham (4.6) and Swindon (4.8) filled third, fourth and fifth places respectively; other affordable towns included Sittingbourne, Southend and Rugby.
The average cost of an annual season ticket for a town that was a one-hour commute to London is £4,989. So a commuter would have to make the same journey for 89 years in order for the daily commute to wipe out the savings they would make on the lower property price.
There are still big savings commuters could make in regards to property even when they reduce the commuting time from an hour. For instance, Londoners who move to live in Hatfield, Orpington, Reading or Billericay, each approximately 40 minutes from central London, could save £353,000 or 48% on house prices. The average price of a home in these towns was £389,000 with an annual season rail ticket costing £3,534.
For those even closer to central London, 20 minutes away, in places like Borehamwood, Ilford and Elstree, home prices are, on average, £297,795 cheaper than central London. However, it isn’t always the case that the further away from central London you are, the cheaper it is. The survey found some places around the capital that are more expensive than central London.
Beaconsfield was one such place. It has an average property price of £996,113 with an annual season ticket costing £3,324. Commuters in Gerrards Cross pay £3,328 for an annual season ticket with house prices costing on average £822,363. Those living in Wimbledon pay £762,957 for a home with a season ticket costing £1,520. Homes in Weybridge cost £760,335 and a season ticket costs £3,624, while in Harpenden its £747,602 for a home and £4,432 for a season ticket.
Elsewhere in England it’s often cheaper to live in the city. England’s second largest city, Birmingham, has an average house price of around £172,000. Yet, if you’re wanting to buy a new home in a town outside Birmingham which has a daily commute of 40 minutes into the city then you can expect to pay £211,661 for a house. That’s also the price, on average, for a property in places such as Burton on Trent, Coventry, Leamington Spa and Derby. For an annual season train ticket from these towns into the centre of Birmingham, it costs, on average, £2,221.
It’s a similar situation in England’s third largest city, Manchester, where towns that are 40 minutes away from the city centre, such as Chorley, Macclesfield and Warrington have homes costing, on average, £204,161. Yet, for houses within Manchester, the average price is £162,214.
Andrew Mason, mortgage products director for Lloyds Bank, confirmed that London commuters who are prepared for a longer daily journey between home and work could make some substantial savings. However, he added: “Whether to live in London or live a further distance away isn’t a just a trade-off between journey times and how much it will cost. There are other major factors such as overall quality of life, family circumstances, the environment of the new home and better schools, that are also taken into consideration.
“It explains why, in some places, commuters are prepared to pay more for their commute when, in terms of money alone, they could be much better off living nearer to where they work.”
The cost of commuting in Scotland
A similar study to the one carried out by Lloyds was done by the Bank of Scotland for Scottish major cities. It showed that Motherwell, with an average house price of £130,268, was the most affordable town for those commuting to Edinburgh; the price of a home in the capital was £225,133. For Glasgow, the best value commuter town was Greenock, where the average price of a house was £120,927 compared to £161,623 for a home within Glasgow. The best place to commute to Aberdeen from, in terms of affordability, was Arbroath. House prices in Arbroath were £127,497 compared to the average house price in Aberdeen of around £83,000 more at £210,522.