City homebuyers are prepared to pay an often-significant premium to live close to transport links, according to research carried out by Nationwide.
Londoners are the most reliant on public transport, with eight out of 10 residents surveyed by the building society saying that proximity to a station was ‘fairly’ or ‘very’ important when choosing their home.
Nationwide’s analysis found that a London property located 1,000 metres from a station commands a 3.5% premium, rising to 5.6% for one 750 metres away. However, a home that is just 500 metres from a station attracts an 8% premium - equivalent to around £42,700 based on average prices in the capital. While slightly down from 9.7% in 2021, this figure is broadly in line with pre-pandemic levels.
It's a similar story in Glasgow and Manchester. In Glasgow, homebuyers face a 4.6% premium if they want to buy a property 500m from a station, compared with an otherwise identical property 1,500m away from the nearest station. This is equivalent to around £8,800 based on average prices in the region.
A property in Manchester which is 500m from a Metrolink or railway station commands a 4.9% price premium - around £10,900 based on average prices in the region - over an otherwise identical property which is 1,500maway from the same transport links.
The willingness of buyers to pay more for properties near to stations and underground services stems from regular transport use, with nearly 60% of Londoners saying they use rail or tube services more than once a week, compared to 37% in Glasgow and 35% in Manchester. Most people said they wanted to live near a station so they could access the city quickly and to make their daily commute to work easier.
Nationwide's research also asked how much more people would pay to live in an area with good transport links. On average, respondents said that they were willing to pay 8% more, though this varied by city. In London, nearly 30% said they’d pay over 10% extra. However, more than half (53%) of respondents in London stated that affordability pressures meant they had to buy or rent near a station that was further away from the city centre.
Andrew Harvey, Senior Economist at Nationwide, said: “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. Meanwhile, in Glasgow and Manchester, around 60% of respondents stated being near a station was either ‘fairly’ or ‘very important’.”
