London workers could save almost £450,000 (60%) on the cost of houses if they are prepared to live one hour’s commuter distance away, research from Lloyds Bank shows.
Towns an hour away such as Wellingborough, Southend, Sittingbourne and Rugby, have an average house price of £295,000 compared to £742,000 in London’s zone 1 or 2.
The cost of a one hour daily commute is nearly £5,000, meaning the commuter would have to make the journey for 89 years to wipe out the saving in house prices.
For those who want to live closer to the capital by living in Hatfield, Billericay, Orpington and Reading would have to pay around £389,000 with a lower average annual rail pass of £3,500, £353,000 cheaper than in central London.
Even those living 20 minutes from the capital in the likes of Ilford and Elstree and Borehamwood could buy at a price nearly £297,800 cheaper.
Andrew Mason, Lloyds Bank mortgage products director, said: “Commuters to London who don’t mind a longer journey between home and work could reap the financial benefits of living outside of the capital.
“However the decision of whether to live in the city or further away is not simply a trade-off between financial costs and journey times.
“Quality of life is also a major factor: family circumstances, better schools, physical environment and homes that offer better value for money also come into the equation.
“That explains why, especially outside London, commuters are often prepared to pay a premium to commute when they could be better off in purely financial terms living closer to their place of work.”
Elsewhere in England commuters to Britain’s second and third largest cities, Birmingham and Manchester, find house prices are often higher outside the city.
The average house price in Birmingham is around £172,000, but several towns around 40 minutes rail journey away – including Derby, Coventry, Burton on Trent and Leamington Spa – command higher average house prices of £211,661.
The same applies to a number of towns that are approximately 40 minutes away from Manchester such as Warrington, Chorley, and Macclesfield, which all have a higher house price (£204,161) than in Britain’s third largest city (£162,214).