Homes near transport hubs still carry massive premium

A home within 500 metres of a tube or railway station in London will carry a massive premium compared to a similar home location 1,000 metres further away.

There are smaller but equally transport-related premiums on properties in Glasgow and Greater Manchester too.

This are the findings made in new research by the Nationwide, which has analysed the ‘transport effect’ on prices after taking account of other property characteristics, such as type, number of bedrooms and local neighbourhood. 

Its senior economist Andrew Harvey says: “The pandemic does not appear to have reduced the desirability of being close to a station in London, despite reduced public transport usage. Indeed, our analysis suggests the premium has actually increased slightly compared with pre-pandemic levels.

“We’ve also seen a noticeable increase in the premium to be located close to a station in the Greater Glasgow area, but in Greater Manchester, homebuyers appear to be placing a little less value on being close to a rail or tram stop compared to before the pandemic.

The Nationwide says a property located 500m from a station in London attracts a 9.7 per cent price premium (approximately £46,800 based on average prices in London).

A property located 1,000m away commands a 4.3 per cent premium, at 750m this increases to 6.8 per cent while a property 500m from a station attracts the 9.7 per cent figure.

“Our analysis suggests that there has actually been a slight increase in station premiums in London compared with pre-pandemic levels. In 2019-20, a property located 500m from a station attracted an 8.6 per cent premium over a comparable property 1,500m from a station” explains Harvey.

“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 around £850,000 in areas where the nearest station is on the Circle line.

“Of all the London Underground lines, average house prices are least expensive where the nearest station is on the Metropolitan line. This probably reflects that it stretches towards the outer suburbs, with only a short section in central London.”

In Glasgow - which has the largest network of suburban railway lines in the UK outside of London - buyers now pay a 7.2 per cent price premium (approximately £11,400 based on average prices in the region) over an otherwise identical property 1,500m from a station. 

This compares with a 3.5 per cent (£5,200) premium based on those buying in 2019-20.

In Greater Manchester - also well served by an extensive network of railway and tram lines, including the newly-expanded Metrolink - a property located 500m from a station attracts a 6.1 per cent price premium (approximately £11,000).