Home buyers in London are willing to pay the highest premium of £42,900 to live within 500m of a tube, metro or rail station.
Latest research from Nationwide on how transport impact property prices in London, Manchester and Glasgow reveals Londoners pay a premium of £42,900 to live 500 metres from a tube, metro or rail station.
This compares to a premium of £12,600 in Greater Manchester and £5,700 in Glasgow and surrounding area.
Londoners such as first time buyers and home movers are more reliant on public transport, less likely to drive and may be willing to pay 9.4% more for a home within 500 metres walk of a station.
The capital also has the densest network of stations and transport services with 94% of properties within 1.5 kilometres of a station whereas Glasgow is 94% and Greater Manchester at 70%.
Short walking distances are attractive
Londoners prefer short walking distances to tube or rail stations and for a house valued at £456,400 they are willing to pay a £42,900 premium compared to a similar property 1.5km away.
If the property is 750m away from the station the premium is 6.6%, at 1,000m this decreases to 4.1% while at 1,250m buyers pay only 1.9% premium.
For remortgage buyers living this close to a tube or rail station the higher property values give them an opportunity to release capital which they can use to improve their home.
House prices vary on different tube or rail lines in London and the following table from Nationwide shows the average house prices for 2019.
| Tube line | Average price |
|---|---|
| Circle | £801,000 |
| Bakerloo | £624,000 |
| Victoria | £573,333 |
| Northern | £563,000 |
| Jubilee | £553,000 |
| Hammersmith & City | £542,000 |
| Docklands Light Railway | £505,000 |
| Overground | £490,000 |
| Piccadilly | £485,000 |
| District | £478,000 |
| Central | £450,000 |
| Metropolitan | £439,000 |
| TfL Rail | £359,000 |
The Circle is the capital’s most expensive tube line is with average house prices of £801,000 serving the most expensive areas including parts of west London.
Higher property values for older homeowners allows the equity release buyer to access wealth using a lifetime mortgage to improve your quality of life or even help your children start or expand a business.
For the London Underground line, average house prices are lower if the nearest station is the Metropolitan line at £439,000 as it stretches to the outer suburbs with a short portion in the capital.
If the station is operated by TfL Rail the average house price is the lowest due stations outside central London and delays in Crossrail with branches extending from Liverpool Street and Paddington.
Buy-to-let landlords with properties near tube or train stations will increase the rent as they know people value the shorter walking distance.
Regions with smaller premiums
Greater Manchester has seen an expansion of the Metrolink network to Manchester Airport and the opening of the ‘Second City Crossing’ has increasing passenger journeys by 9% in 2017/18.
Andrew Harvey Nationwide’s Senior Economist said, as a result of this expansion around 80% of properties in the City of Manchester are now within 1km of a station.
A property located 500m from a station attracts a 7.8% price premium or £12,600 more than a similar home 1.5km away, at 750m this decreases to 5.4%, at 1,000m this is 3.3% and at 1,250 buyers pay only 1.5% premium.
For home movers leaving areas with high premiums to areas further away from a station, they may have extra equity to upsize and buy a larger home or can reduce their mortgage.
Glasgow has the largest network of suburban railway lines in theUK outside of London, with 61 million passenger journeys on rail and 11.4 million using the Glasgow subway, says Mr Harvey.
A property 500m from a station attracts a 3.8% price premium or £5,700 more than a similar home 1.5km away, at 750m this decreases to 2.7%, at 1,000m this is 1.7% and at 1,250 buyers pay only 0.8% premium.
What are your next steps?
Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living as costs rise.
Learn more by using the mortgage cost calculators, equity release mortgage calculator and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.
