Londoners pay £42k premium for houses near train or Tube stations

Londoners pay a £42,700 premium to live close to a train or Tube station, new research suggests.

A property in the capital that is 500m (0.31 miles) away from a station is 8% more expensive than a similar property 1,500m (0.93 miles) from one, a study by Nationwide found.

In contrast, the premium is 4.9% (£10,900) in Manchester and 4.6% (£8,800) in Glasgow, the building society’s study discovered.

Property near Circle line stations is the most expensive in terms of all the London Underground lines, with an average house price of £729,000, the research also found.

The cost of a property gradually decreases the further it is from a station, according to the research.

The 8% premium at 500m away falls to 5.6% at 750m, and 3.5% at 1,000m.

A common benchmark for the time it takes to walk 500m is about six minutes, and so there is a trade-off for commuters in terms of the price paid for housing costs and the time spent making their way to the nearest station.

Nationwide senior economist Andrew Harvey said: “London homebuyers continue to be willing to pay a significant premium for being close to a station compared with those in Glasgow and Manchester.

“This likely reflects the greater reliance on public transport in the capital.”

Richard Donnell, research director at the online property portal Zoopla, was of the same view. He told BBC London that the capital “drives a bigger premium because of its scale and size”.

He added that “location really matters” when it comes to house prices, and that accessibility to transport was a major driver of property values.

As part of the study, Nationwide commissioned a survey of 1,000 residents in each of the three cities.

Londoners placed a heavy emphasis on good transport links in determining where to live, with 80% of respondents saying being near a station was important when choosing to buy or rent their property.

This compared with about 60% for Glasgow and Manchester.

The most commonly cited reasons for choosing to live near a station were that this enabled quick travel around the city and made the commute to work easier.

However, more than half (53%) of Londoners said that affordability pressures meant they had to buy or rent near a station that was further away from the city centre.

Mr Donnell said that “affordability is driving more decisions and making people look further afield”, which has driven Londoners to look further afield to the suburbs, or even to towns outside the capital such as Reading and Milton Keynes.

Mary-Lou Press, president of Propertymark (formerly the National Association of Estate Agents), said changing work habits, such as the rise of remote and hybrid working, had made this decision much easier.

“These flexible working models enable individuals to move to more affordable areas, while keeping their current jobs,” she said.

According to the Nationwide study, the Circle line – which serves central London’s most expensive areas – was rated as the least desirable line to live near.

The price of properties near the Elizabeth line were on average the lowest of any London Tube or rail line, the research found. The route was found to be the most desirable to live near, with 12% of respondents stating it is their nearest line and a further 14% stating they would like to live close to it.

Mr Harvey said the Elizabeth line’s lower average house prices were primarily because most of its stations serve suburban areas, where prices tend to be lower.

Similarly, the Metropolitan line, which mostly runs in the outer suburbs and only has a short section in central London, has the lowest average house price (£463,000) of all Underground lines.

Additional reporting by PA Media