Study looks at price premiums near stations in London, Manchester and Glasgow
Home owners in London pay the highest price premium to live near a station, but tram/rail links also attractive to home buyers in Manchester, less so in Glasgow, according to new research.
There is a £42,900 premium in London for property 500 metres from the nearest station, compared with a similar property 1.5 kilometres away, a £12,600 premium in Greater Manchester and £5,700 premium in Glasgow and surrounding area on comparable basis.
The study from home lender the Nationwide looked at how the proximity to either a metro or railway station impacted property prices in London, Manchester and Glasgow, after taking account of other property characteristics, such as property type, number of bedrooms and local neighbourhood type.
“London homebuyers appear willing to pay a greater premium for being close to a station compared with those in Greater Manchester and Glasgow. This probably reflects the greater reliance on public transport in the capital, with residents less likely to drive,’ said Andrew Harvey, Nationwide’s senior economist.
The analysis report also shows that London has the densest network of stations and services, with 94% of properties within 1.5 kilometres of a station, compared with 72% in Glasgow’s Strathclyde Partnership for Transport area, and 70% in Greater Manchester.
In London a property located 500 metres from a station attracts a 9.4% price premium, a property located 1,000 metres from a station commands a 4.1% premium, at 750 metres this increases to 6.6%.
Just 6% of properties in London are more than 1,500 metres away from a tube or railway station, and these are predominately in outer suburban areas, where stations tend to be more spread out serving larger catchments.
Excluding the City of London, Camden, Tower Hamlets and Kensington and Chelsea are amongst the best connected boroughs, with around 75% of properties within 500 metres of a station.
Havering, Bexley and Barking and Dagenham remain the least accessible boroughs, with fewer than 20% of properties within 500 metres 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,’ Harvey explained.
The report points out that Greater Manchester is served by an extensive network of railway and tram lines. Recent years have seen a further expansion of the Metrolink network to Manchester Airport and the opening of the Second City Crossing. Metrolink saw a 9% increase in passenger journeys in 2017/2018, the strongest growth amongst England’s light rail and tram systems.
The research shows that buyers are willing to pay a noticeable premium to be close to either a Metrolink or railway station. A property located 500 metres from a station attracts a 7.8% price premium over an otherwise identical property 1,500 metres from a station.
Glasgow has the largest network of suburban railway lines in the UK outside of London. The area covered by the Strathclyde Partnership for Transport (SPT) includes around 185 railway stations with a further 15 subway stations in Glasgow city centre. In 2016/2017 there were 61 million rail passenger journeys within the SPT area and 11.4 million journeys using the Glasgow subway.
But buyers are only willing to pay a modest premium to be close to a railway or subway station. A property located 500 metres from a station attracts a 3.8% price premium over an otherwise identical property 1,500 metres from a station.