Homes cost £20,000 extra for a shorter walk to the station
Homebuyers pay premium to live close to a tube or train station according to Nationwide Building Society.
Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said:
“London has an extensive network of underground and surface rail lines which form an important part of the city’s infrastructure. 34% of Londoners usually use either National Rail or London Underground services to travel to work, compared to 8% for Great Britain. Therefore, one might expect those buying property in the capital would prefer to live close to a tube or train station and be willing to pay a premium for this.
“Using the Nationwide House Price model we have assessed how property prices in the Greater London region vary in relation to the distance to the nearest tube or train station. We have isolated the specific impact this has over and above other property characteristics, such as property type, size and local neighbourhood type2. Our figures suggest that a property located 500m from a station would attract a 7% price premium (approximately £20,300) over an otherwise identical property 1,500m from a station.
“The diagram [above right] shows the price premium for identical properties progressively closer to a station. The value-added is measured relative to a property 1,500m from the nearest station. An identical property located 250m closer (so 1,250m from station) commands a 1.6% premium. Premiums increase as you move closer towards a station. For example, an identical property located 1,000m from a station would command a 3.4% premium, whilst at 750m this increases to 5.2%.
Marginal impact on prices is greatest close to stations
“Our research also revealed that marginal impact on price diminishes as the distance from the nearest station increases. For example, the price difference between properties located 500m and 1,000m away from a station is 3.7% (around £10,700). This compares with 3.4% (£9,900) for properties located 1,000m and 1,500m from the nearest station and 3.1% (£9,000) when comparing properties 1,500m and 2,000m away. This suggests that whilst homebuyers would prefer to live close to a station, it becomes less important once outside easy walking distance. This could be because they are more likely to use alternative forms of transport such as a car, bus or bike. Properties more than 1,500m away from a station are predominately in the outer areas of Greater London in zones 5 & 6, where stations tend to be more spread out serving larger catchments.
Best connections in inner boroughs
“Access to rail transport is generally very good within Greater London, with 93% of properties located within 1,500m of a station. Whilst the tube is perhaps the best known aspect of London’s transport infrastructure, the National Rail lines also form a vital part of the network, with 70% of properties closest station being National Rail operated. In the inner zones however, the tube is more dominant, as you might expect given the geography of the network.
Average Circle line prices nearly half a million pounds
“Within the tube network, the Circle line serves the capital’s most expensive areas taking in much of central London and also parts of west London. Average house prices are nearly £500,000 in areas where the nearest station is on the Circle line.
Average house prices are least expensive in areas where the nearest station is served by the Central line, with an average price of around £275,000. Although the line passes through some of west London’s pricier areas such as Notting Hill, it also serves some of east London’s least expensive boroughs, such as Waltham Forest and Redbridge.”
NB. The data was drawn from Nationwide’s house purchase
mortgage lending at the post survey approvals stage in the
Greater London region in 2009. The sample only includes properties located within London boroughs, so excludes some of the furthest extremes of the London Underground network (for example Metropolitan line stations in Hertfordshire).
August 21, 2012