Buyers continue to pay more for homes near rail and tram links, but premiums have fallen since 2021
Despite a slight reduction in the premium compared to previous years, properties located close to rail, underground, or tram stations in London, Manchester, and Glasgow continue to attract higher prices, latest analysis from Nationwide Building Society has revealed.
In London, homes situated within 500 metres of a station are, on average, £42,700 more expensive than similar properties 1,500 metres away. This represents an 8% premium, down from 9.7% in 2021.
In Greater Manchester, the premium stands at £10,900 (4.9%), while in Glasgow, it is £8,800 (4.6%). Both cities have also seen a decrease in the premium since 2021.
“Our recent market research confirms that transport links remain important to those living in major cities, with over 80% of Londoners saying being near a station was either ‘fairly important’ or ‘very important’ when choosing to buy or rent their current property,” said Andrew Harvey, senior economist at Nationwide.
“Meanwhile, in Glasgow and Manchester, around 60% of respondents stated being near a station was either ‘fairly’ or ‘very important’. This is likely to reflect that those living in London typically use their local station more often, with nearly 60% using either rail or tube more than once a week. This compares with 37% in Glasgow (for rail and subway) and 35% in Manchester (for rail and Metrolink).”
The research also indicates that 85% of respondents across the three cities live within a 30-minute walk of a station. The main reasons cited for choosing such locations include ease of travel within the city and simpler commutes. A notable 10% of those surveyed do not own or want a car.
Commuting patterns also differ between cities. In London, the average journey by tube or train is nearly 30 minutes, about five minutes longer than in Glasgow or Manchester. Fifteen percent of London commutes exceed 45 minutes, compared with 9% in the other two cities. Sixty-five percent of respondents said proximity to a station helped them avoid other forms of transport.
When asked about the value of good transport links, respondents were, on average, willing to pay 8% more for a property in a well-connected area. In London, nearly 30% would pay over 10% extra for such convenience.
“London homebuyers continue to pay a significant premium to be close to a station,” Harvey said. “The illustration below shows the price premium for similar properties at various distances from a tube or railway station (relative to 1,500 metres away). As you might expect, the premium buyers are willing to pay increases as you move closer towards a station.”
The Circle line, which passes through central and west London, is associated with the highest average house prices at around £729,000. However, it is the least popular among those surveyed, likely due to affordability. Over half of London respondents said cost pressures forced them to look further from the city centre. In contrast, the Elizabeth line, serving mainly suburban areas, has the lowest average prices at £401,000 but remains popular among buyers.
The London Overground is the most commonly used service, with 28% of respondents living near it. Prices around Overground stations vary, with the Mildmay line being the most expensive and the Liberty line the least.
In Greater Manchester, the Metrolink tram and rail network continues to add value to nearby properties, though the premium has dropped from 6.1% in 2021 to 4.9% this year.
Glasgow, which has the largest suburban rail network outside London, also sees a price premium for homes close to stations, though this has fallen from 7.2% in 2021 to 4.6%. The majority of properties in Glasgow City, Inverclyde, and West Dunbartonshire are within 1.5 kilometres of a station, reflecting strong connectivity in these areas. Forty percent of Glasgow respondents said affordability meant they had to look further from the city centre.
“Good schools, access to better transport links and ideal local social environments are key for many people when looking to move,” commented Mary-Lou Press, president at NAEA Propertymark. Changing work habits, particularly the rise of remote and hybrid working, have made relocating a much more realistic option for many people. These flexible models enable individuals to move to more affordable areas or places offering a better quality of life, all while keeping their current jobs.
“For instance, the average property price in inner and outer London was approximately £640,000 last month. By comparison, someone commuting to London from a city like Manchester could save around £260,000 on the average home.”
According to Jeremy Leaf, a north London estate agent, the pandemic accelerated trends which were starting to happen and the increase in working from home made a difference to where people chose to buy and rent for quite a long time.
“However, that trend is slowly starting to reverse as people return to work – not quite to the levels before COVID but certainly approaching,” he said. “These figures reflect that trend to some extent although of course the cost of property and transport are other factors.
“In larger cities, buyers and tenants have to travel quite a way to find value for money which has a knock-on effect on their distance and convenience to place of work. However, with car driving proving to be more restrictive in built-up urban areas, good public transport links remain a must.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
