23 July 2013

Posted by Discount Insurance on Tuesday, July 23, 2013
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According to latest news reports house prices rise by £170,000 for every minute spent on a tube journey - a staggering figure in anyone’s books. So are transport links becoming the most important factor concerning house prices?   

These recent figures, compiled by Mayfair estate agency Wetherell, are almost certainly to be taken with a pinch of salt, but do show that £2.2 million separates the cost of an average apartment in Knightsbridge and King’s Cross, two stations just 13 minutes apart.  It is from these contrasting areas, that the figure of £170,000 a minute has been calculated.

The research shows that Knightsbridge is the most expensive tube station to live by, with the average cost of a property near the station standing at £2.67 million.  The cheapest tube station to live by is Elephant and Castle, where the average two-bedroom apartment is priced £162,000 for a property with good access to Northern and Bakerloo lines.

"It is staggering to see that just a few stops along same the tube line can mean rises and falls in property values worth hundreds of thousands and even millions of pounds,” said Peter Wetherell, managing director of Wetherell.

The proximity to tube lines and rail links to central London is seeing prices escalate away from nationwide averages, even for modest properties. Currently the most expensive tube line to live on in central London is the Piccadilly Line, where the average two-bedroom apartment is now worth £1.36 million.In comparison, the cheapest line is the Northern Line, where the same property would cost £613,000. However, this is still 3.8 times higher than the average UK house price.  

With time being a quality that not many of us have at the moment, it seems the public are keen to save as much they can on the commute to work, and transport links are becoming a decisive factor in where we settle. 

The government is pumping more and more money into improving transport across the capital, what is traditionally known as ‘Prime London’ is expanding to less fashionable places. The new orbital project, described by Boris Johnson as ‘the M25 of rail’, will connect areas such as Surrey Quays and Queen’s Road Peckham to Clapham Junction, creating new property ‘hot spots’ in these areas.

The Crossrail project, set for completion in 2018, is expected to boost house prices by up to 44% in key places along its London route.  Places such as Ealing in the west and London suburbs of Essex, such as Romford and Brentwood, in the East will see housing booms due to their increased transport links to central London.

The current journey from Brentwood to Canary Wharf for example, could be as much as halved, meaning that the £170,000 average house price won’t stay as such for long with property investor’s eyes already lighting up.  

According to another recent survey, the majority of students cited a property’s proximity and transport links to the university as the most important factor whilst looking for accommodation.

The survey, commissioned by accomodationforstudents, questioned over 1,500 students in focus groups nationwide, showed that off-campus students, were less concerned about the condition and price of the their accommodation, compared to how long it would take to travel regularly to lectures and tutorials.

However, not all believe it is as cut and dry concerning the relationship between transport and house prices.  
Dr Gabriel Ahlfeldt of London School of Economics said: 'Major transport projects entail some of the largest public expenditure programmes in the world and yet, until now, we have not been able accurately to predict how property values will rise as a result of these improvements. This is a matter of great public and policy interest because it helps to calculate the social benefits that transport projects bring and the additional revenue they raise through property taxes, such as stamp duty or council tax for instance.

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Richard Anthony