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House prices versus commute times: the top 20 most affordable yet convenient areas in London by Angus Taylor

Category : Figure It Out

With house prices and rents in the capital reaching new heights, Londoners are increasingly looking to the suburbs and beyond to find affordable property. When deciding where to live, Londoners face the inevitable trade-off: stay central and enjoy short commute times but exorbitant prices, or; move further out to somewhere more affordable but endure longer journeys into work. But is this always the case?

In this article, I investigate whether it’s true that moving to the outer boroughs always leads to longer commute times and try to identify the areas that represent the best value in terms of both affordability and convenience.

To answer these questions I gathered data on average prices, rents and journey times for all 566 Underground, Overground, Rail and Tramlink stations in the Transport for London Oyster Zone, excluding zone 1. The prices and rents were found on Zoopla and represent the average asking prices for properties in the same post code area of the station.

For commute times, I used the journey time from the station in question to its closest zone 1 station, mid week during the morning peak, as found on Transport for London’s Journey Planner. For example, the closest zone 1 station for Stratford on the Central Line is Liverpool Street and it takes 10 minutes to make this journey in rush hour.


Chart 1: The journey times from all stations to their nearest zone 1 station. The average minutes to zone 1 for each zone is represented by the red lines.

As would be expected, journey times generally increase on average by zone, but there are many stations which buck this trend.

A good example is Surbiton in zone 6, from which you can get into Waterloo in just 21 minutes in rush hour. However, the best example is Watford Junction (zone 9), from which you can get to Euston in just 19 minutes on the London Midland service, a time which beats the zone 3 average! It’s no surprise that the area around this station was found to be the most in demand area in London for house buyers last year.


Chart 2: The average current asking prices and the average commute times from stations in each zone (excluding zone 1).

Average prices fall more than £200,000 between zones 2 and 3 but with an increase in travel time of over 10 minutes. The differences between the other zones are much less in comparison.


Chart 3: The average current asking prices and the average commute times per station.

Plotting the same information as in Chart 2 but by station shows there is a clear and strong relationship between commute times and house prices. Prices seem to fall exponentially with increased journey time.

In fact, a simple linear regression analysis (Chart 3) shows that if one is willing to endure an additional 10 minutes of commute time, it is possible to save on average a whopping £110,000 on the price of a two bedroom home!

A similar analysis for average rents shows that moving 10 minutes closer into London will cost an additional £280 per month on average for a flat with two bedrooms. Clearly, there are significant savings to be made if you are willing to spend more of your life on the Tube!

However, the overall trend masks the significant variance in prices for any given level of commute time. We can see that the stations that fall in the bottom left of Chart 3 have the best of both worlds with relatively short journey times and reasonable prices. So which stations represent the best value for money?

To identify the best value areas, I can refer to the regression line. Any station that falls below the line has lower average house prices than that expected by the model. In fact, the further a station falls below the regression line, the better value it is considering its commute time.

Chart 4 shows how by drawing a line parallel to the regression line, such that 20 stations fit in the triangle between the line and the two axes, we can identify the best value stations.


Chart 4: Stations which fall within the triangle represent the top 20 bet value stations with respect to commute time.

 

Table 1 reveals the top 20:


Table 1: Top 20 best value stations, with average prices and rents of the surrounding post code and commute times to zone 1.

Barking ranks top, where a two bedroom property can be found for ‘just’ £250,000.  It’s also very commutable into Fenchurch Street, in 18 minutes. It’s interesting to note that 12 of the top 20 are connected to London by rail services. These areas benefit from cheaper prices and rents, and with quick services into mainline stations in zone 1 such as London Bridge, Fenchurch Street and Liverpool Street, these areas can be very commutable (if you know your train timetable!).


Map 1: Top 20 best value stations

Map 1 shows that many of the top 20 are in the east side of the capital. In particular, stations in zones 3 and 4 on the Central and District lines and TfL Rail have both reasonable prices and commute times of less than 20 minutes.

This analysis of course leaves out many factors that determine where people choose to live, not least local amenities, schools, council tax, and whether the area is actually a nice place to live! However, it has shown that if you look around it’s possible to find areas that are both good value and also within a reasonable commuting time to central London.

About the author

Angus Taylor
Angus Taylor
Angus is a Consultant with Capgemini Consulting specialising in Data Science and Analytics. He has experience across the retail, utilities and government sectors.

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