Good transport links continue to add the most value to house prices in London, despite more people working from home.
House prices in the capital command an average £42,700 premium for homes 500 metres from the nearest station, compared with a similar property 1,500 metres away, according to Nationwide.
The building society also found that homes near the Circle line on the London Underground had the highest average house prices, followed by the Bakerloo line.
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Andrew Harvey, Nationwide's senior economist, comments: “Transport links remain important to those living in major cities, with over 80% of Londoners saying being near a station was either ‘fairly important’ or ‘very important’ when choosing to buy or rent their current property.
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“Meanwhile, in Glasgow and Manchester, around 60% of respondents stated being near a station was either ‘fairly’ or ‘very important’.”
UK house prices fell 0.1% last month, according to Nationwide, with the average property price now sitting at £271,079.
We delve into the building society’s data on transport links, which could be useful for anyone thinking of buying a house in London, Glasgow and Manchester.
The house price premium to live near a tube or train station
London homebuyers continue to pay a significant premium to be close to a tube or railway station.
A property located 1,000 metres from a station commands a 3.5% premium, versus one that is 1,500 metres away, according to Nationwide. This rises to 5.6% for homes at 750 metres away.
Homes located 500 metres from a station attract an 8% premium (approximately £42,700 based on average house prices in London), compared to an otherwise identical property 1,500 metres from a station.
“Our analysis suggests that station premiums in London are somewhat lower compared with 2021 [when homes 500 metres from a station cost 9.7% more on average]. But, they’re broadly similar to pre-pandemic levels, where a property located 500 metres from a station attracted an 8.6% premium (based on analysis for 2019-20),” notes Harvey.
Over in Manchester, homebuyers are also willing to pay a premium to be close to either a Metrolink or railway station, but this has fallen since 2021.
A property located 500 metres from a station attracts a 4.9% price premium (around £10,900 based on average prices in the region) over an otherwise identical property 1,500 metres away. This compares to 6.1% in 2021.
Nationwide also analysed the transport link effect in Glasgow. It found that homebuyers paid a 4.6% premium for a property 500 metres from a station (around £8,800 based on average prices in the region) compared with one 1,500 metres away. This is lower than the 7.2% premium identified in the building society’s 2021 research.
The higher “station premium” seen in London likely reflects the fact that people in the capital are more likely to say that living near a station is important to them, and they also use their local station more often.
“Those living in London typically use their local station more often, with nearly 60% using either rail or tube more than once a week. This compares with 37% in Glasgow (for rail and subway) and 35% in Manchester (for rail and Metrolink),” says Harvey.
London tube lines with the highest and lowest average house prices
The Circle line serves the capital’s most expensive areas taking in much of central London and also parts of west London.
Perhaps unsurprisingly then, areas where the nearest station is on the Circle line boast the highest average house price, of £729,000.
The Bakerloo line comes second, with an average house price of £617,000. Victoria comes third (£587,000).
The cheapest line is the Elizabeth line, where areas near the stations have an average house price of £401,000. The next cheapest is Metropolitan (£463,000). Both these lines stretch beyond the capital, with multiple stations outside of London, which would reduce the overall average house price figure.
Looking at the Overground, Harvey comments: “Average prices around Overground stations are £529,000 although this varies by line, with the Mildmay line (which connects Richmond/Clapham to Stratford via Hampstead) the most expensive at £645,000.
“Meanwhile, the Liberty line (which runs between Romford and Upminster) is the cheapest at £358,000.”
