While UK house prices are high, certain features are deemed important enough for buyers to go to any lengths to meet the asking price. For example, broadband speeds and proximity to public transport are two vital factors that have significant influence on what buyers are willing to pay. Research conducted by the Nationwide Building Society reveals that property prices rise dramatically when the properties in question are situated near to a tube station, and that a seemingly small distance can make a huge difference in price.
More Londoners are using public transport
London is famous for its tube system, and it turns out the number of people who have to mind the gap is increasing every day. According to the Economist, 3.7m people use the London underground each day while 6.4m take the bus.
Studies also indicate that those who spend a long time commuting to work using public transport generally have higher-paying jobs than those who don't. This demonstrates the extent to which working Londoners rely on public transport for their livelihoods. According to Bloomberg, about 50% of working Londoners use public transport, mainly the underground and railways.
It's clear why proximity to a tube station is a much higher priority for home buyers in London than it is for those in other big other UK cities, such as Manchester and Glasgow. It's especially important for younger generations, many of whom have yet to secure a position high-paying enough for them to purchase their own motor vehicle (and some who simply have no interest in owning one to begin with).
The cost of a few meters
London has the densest railway network, according to Nationwide's chief economist Robert Gardner. Ninety-four per cent of properties in the capital are within at least 1,500 metres of a station, but since they're valued at about £42,000 less on average than properties within 500 metres, it seems 1,500 metres is not close enough for most Londoners.
A few hundred metres can significantly increase the premium that Londoners are willing to pay for a house. There premium on a property 1000 metres from a station is 4.9%. It goes up to 7.6% on a property 750 metres away, and reaches a staggering 10.5% for properties located 500 meters from the station – compare this to the premiums of 6% in Glasgow and 4.6% in Manchester.
This explains why Camden is one of the most expensive areas to buy property in London (average property values around £843,000). With 85% of properties in the area located less than 500 metres from a tube station, it is the borough best served by London's underground network.
Not all tube lines are equal, however, with the Circle line providing the biggest boost to property values due to its connections with central London. The Metropolitan line is deemed the least beneficial, making it the most affordable option for home buyers seeking proximity to a tube station.
Image source: The Guardian