Buying a property close to a tube or train station in London means forking out tens of thousands of pounds more, research from the Nationwide shows.
It indicates that properties within 500 meters of a station can command an extra £27,000 compared with one that is 1,500 meters away and these premiums appear to have increased since 2010.
On average, London houses closest to Circle Line stations are the most expensive and those nearest the Metropolitan Line are the cheapest.
'We examined how the proximity to a tube or railway station impacted property prices in Greater London after taking account of other property characteristics, such as property type, size and local neighbourhood type,' explained Robert Gardner, Nationwide's chief economist.
'Our research illustrates that people are willing to pay a significant premium to be close to a station, and suggests that this premium has increased relative to two years ago when we last explored the issue,' he added.
Premiums increase as you move closer towards a station. A property located 1,000 meters from a station would command a 4.1% premium, whilst at 750 meters this increases to 6.5% and to 9.1% for properties 500 meter from the station.
'Interestingly, only 6% of properties in London are more than 1,500 meters away from a station, and the vast majority of these are in outer suburban areas, where stations tend to be more spread out serving larger catchments,' said Gardner.
Changes to transport network also a factor to consider over time Since the last time Nationwide examined this issue, the East London Line extension work has been completed and a London Overground service is now operating between Highbury and Islington and Crystal Palace and West Croydon. This has improved rail access in the borough of Hackney, with new stations at Dalston Junction, Haggerston, Hoxton and Shoreditch.
'This is likely to have had a positive impact on property valuations in these areas. Indeed, since the reopening of the East London Line, property prices in Hackney have increased by 11%, the second strongest performance amongst the London boroughs,' said Gardner.
The boroughs best served by the tube and rail network include Westminster, Camden and Tower Hamlets, where over 75% of properties are within 500 meters of a station. 'These boroughs are also some of the most expensive areas in the capital. Havering and Bexley are amongst the least connected boroughs, with fewer than 20% of properties within 500 meters of a station. Average house prices tend to be lower in these areas, but this also reflects that they are further away from central London,' explained Gardner.
Amongst the outer boroughs, Brent and Merton both stand out as having good transport connections, with more than 50% of properties within 500 meters of a station. Brent benefits from access to a number of tube lines, with the Metropolitan, Jubilee, Piccadilly and Bakerloo all passing through. Merton is also served by a wide range of routes, including the Wimbledon branch of the District line and national rail services operated by South West Trains, Southern and First Capital Connect.
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 £650,000 in areas where the nearest station is on the Circle line.
Average house prices are least expensive where the nearest station is on the Metropolitan line. 'This probably reflects that the line stretches towards the outer suburbs, with only a short section in central London,' added Gardner.
SOURCE Propertywire
