Should you live near work or commute?

Report shows Reading is the most popular station for commuters into London, followed by Guildford, St Albans and Woking

Alex Johnson
Friday 19 October 2012 10:58 BST
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Rail commuters to London are on average financially much better off catching the train rather than living close to where they work work, according to figures from Lloyds TSB. 

The latest Lloyds TSB commuter towns survey looks at differences in house prices between commuter towns and the place of work as well as the costs and time of commuting when travelling to work using the national rail network.

It shows that while many commuters in the south east make a 60 minute train journey (average annual rail cost £3,800) but in so doing also benefit from a house price that is on average £308,000 lower than living close to their office in central London. On top of this, homebuyers can get more for their money outside central London due to the lower price of property per square metre outside the capital.

House prices in towns about an hour by train from the capital such as Newbury, Crawley, Bracknell Forest and Maidstone are on average around £247,000, or £308,000 lower than the average of £555,000 for a property in an area within travelcard zones 1 and 2.

It means a commuter would need to commute for 81 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 greatly so. Commuters from towns in the ‘half hour zone' - such as Hemel Hempstead, Stevenage, Sidcup and Redhill - pay an average house price of £272,000,  still £283,000 lower than in zones 1 and 2. These also come with a lower average annual rail pass cost of £2,800.

Even commuters whose journey is just 15 minutes from central London - for example Borehamwood or East Croydon - benefit from an average house price nearly £212,000 than in the central zones of the capital.

With an average of 2.35 million commuters in 2010/11, Reading is the most popular station outside London for commuters into London Guildford, with more than 1.32 million season ticket users in 2010/11, is the most expensive town with an average house price of £400,674. It is followed by St Albans (1.57 million commuters, average price of £378,937) and Woking (1.63 million commuters, average house price of £365,236).

However, for commuters to Britain's second and third largest cities, house prices are often higher outside the city. The average house price in Birmingham is around £150,000, whereas Solihull, 15 minutes rail journey away from central Birmingham, has an average price around 60% higher at £242,231. Similarly, Leamington Spa, which is 30 minutes from the city centre, has a significantly higher average house price, at £240,760.

The same applies to Manchester, where an average house in the city of £140,543 is lower than in Stockport (£184,860, 15 minutes away) or Macclesfield (£223,308), Warrington (£167,290) and Chorley (£157,294) which are all half an hour from the city.

Suren Thiru, Lloyds TSB Housing Economist, said: "Distance from work is often the deciding factor for purchasing a home. It is generally true that the further you commute, the larger are the financial savings made in terms of lower house prices. A major consideration for commuting to London is that the typically higher income that can be earned, tends to go much further in towns outside the capital. In addition, bigger homes can be bought for lower prices."

In Scotland, rail commuters to Edinburgh are in a similar position to London commuters, according to research by Bank of Scotland.

Commuters from Dunblane, Glasgow and Motherwell make a 60 minute train journey with an average annual rail cost of around £2,700. House prices in those areas are £75,000 (37%) lower on average than living close to work. 

And similarly again, house prices in places half an hour's rail travel from Edinburgh such as Dunbar, Falkirk and Livingston are 34% (nearly £67,500) lower than in the centre of the city. The annual cost of a half-hour commute to the capital is around £1,500.

Commuters who live around 30 minutes rail travel time from Glasgow (Linlithgow, Stirling, Greenock, Motherwell) enjoy house prices about£6,000 (5%) lower compared to almost £127,000 in Glasgow. An average annual rail pass costs close to £1,600.

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