Does the cost of commuting negate the savings of living out of London?
01-19-2014
Does the cost of commuting negate the savings of living out of London?
Ginetta Vedrickas
Commuting to London from Cambridge’s Ceres development could cost more long-term (Picture: Alamy)
How much does a season ticket eat into the savings you make by leaving London?
With London’s property prices spiralling, moving further out in search of value can be a smart decision. But, as rail costs also rise, a survey reveals that what you could save on mortgage payments you lose on commuting costs.
Estate agency Haart compared property prices around commuter hubs with the cost of an annual train season ticket and found, on average, half of any mortgage savings were lost. The study found that mortgage savings achieved by living in hubs such as Norwich or Leamington Spa is £10,799 a year but the average annual season ticket is £5,160.
Oxford and Cambridge are popular with London exiles but the survey found both hotspots leave you out of pocket if you commute to London.
In Oxford, you’d lose £2,132 and in Cambridge £430 per year, thanks to average property prices in both exceeding £350,000 and season tickets costing around £4,000 a year. Average Oxford property prices are £23,804 more than in Cambridge and an annual season ticket costs £512 more.
King's Cross station, London
A survey has found that commuters could be out of pocket by travelling into London (Picture: Oli Scarff/Getty Images)
You might not make savings, but developer Hill’s Tony Woodman says Cambridge is a destination in itself. Woodman finds relocatees often live and work in the city where penthouses at Hill’s development Ceres are £499,995 with a new phase of homes launching in July.
‘It is an economic powerhouse with internationally renowned technology companies such as AstraZeneca moving its headquarters here and creating a wealth of employment opportunities,’ says Woodman. ‘People also choose to live and work in Cambridge to enjoy its historic and cultural appeal.’
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Haart’s Paul Smith says certain towns, particularly traditional university towns, which have high property prices, are becoming less attractive to commuters. ‘For a couple, the annual cost of travelling in to London could mount up to £10,000,’ he says.
Canny commuters can still make savings. The survey’s destination hot-spots include Southampton, Southend and Grantham, which all could save you more than £8,000 a year (see table, left). For example, a season ticket from Southampton, a commute of around 80 minutes at peak times, costs £4,308. Set against mortgage savings of approximately £12,900, you would be £8,600 better off.
And buyers are catching on to such winning combinations. Helen Asteris, of estate agents Fox & Sons, says figures suggest the Southampton market is booming, with new buyer registrations up 55 per cent annually and property price growth up 11 per cent.
‘This growth is in part driven by the popularity of Southampton as a commuter hotspot, with ease of access to London,’ she says.
‘However, supply is failing to meet demand, with the volume of new properties coming on to the market up just nine per cent annually, which will drive prices up.’
Southend-based agency Hair & Son is not surprised the town is becoming more popular with London buyers. ‘The cost of living is cheaper and it’s a great seaside spot, which is perfect for families,’ says Hair’s Steven Smith. ‘There’s also a lot of regeneration, such as a new library and university campus, plus it’s an easy commute into Fenchurch Street.’