Homeowners who are prepared to spend an hour commuting to work can save up to £450,000 on the price of their property, research showed today.
The average cost of a home within an hour’s commute of London is just £272,000, significantly less than the typical price of £722,000 commanded by properties in zones 1 and 2 of the capital.
Even once the cost of rail fares is factored in, commuters from towns such as Crawley, Newbury, Colchester and Chatham can still make significant savings, according to Lloyds Bank.
House prices The average annual cost of travelling into London from towns an hour away is £4,944, meaning a commuter would need to travel for 91 years before their rail fares wiped out the saving they would make on house prices.
The group said another advantage of commuting was that buyers could earn a higher salary by working in London, compared with the town in which they live, making local housing more affordable.
The most affordable town from which to commute is Wellingborough, where house prices average £160,245, giving a price earnings ratio of just 3.4 for someone on the typical London salary of £46,915, compared with 4.9 for someone earning the local average of £33,001 a year.
Andrew Mason, mortgages director at Lloyds Bank, said: “In nearly all towns in this survey housing affordability is significantly better with a London salary compared to what can be earned locally.
“For commuters with up to an hour’s journey to central London, the reward is an annual salary that is, on average, 22 per cent, or £8,500, higher than what they could earn in their place of residence – which is close to £38,500.
“In the 10 most affordable commuter towns the uplift in annual earnings by working in London is nearly £13,000.”
But while those who work in London can save considerable sums by opting to commute, the reverse is the case in other areas of the country.
People working in Birmingham and Manchester can actually save money by buying a home in the city, rather than the surrounding area.
The average cost of a home in Birmingham is £162,000, but several towns within a 40-minute rail journey of the city, including Walsall, Wolverhampton, Coventry, Burton on Trent and Leamington Spa, have average house prices of around £175,000.
In addition to having higher housing costs, commuters living in these towns but working in Birmingham also have to pay an average of £1,900 for an annual rail pass.
The situation is similar in Manchester, where a home in the city costs around £151,330, while property in towns a 40-minute rail journey away, such as Warrington, Chorley, Huddersfield and Macclesfield, average £168,000.