A home within 500 metres of a tube or railway station in London will carry a massive premium compared to a similar home location 1,000 metres further away.

There are smaller but equally transport-related premiums on properties in Glasgow and Greater Manchester too.

This are the findings made in new research by the Nationwide, which has analysed the ‘transport effect’ on prices after taking account of other property characteristics, such as type, number of bedrooms and local neighbourhood.

Its senior economist Andrew Harvey says: “The pandemic does not appear to have reduced the desirability of being close to a station in London, despite reduced public transport usage. Indeed, our analysis suggests the premium has actually increased slightly compared with pre-pandemic levels.

“We’ve also seen a noticeable increase in the premium to be located close to a station in the Greater Glasgow area, but in Greater Manchester, homebuyers appear to be placing a little less value on being close to a rail or tram stop compared to before the pandemic.

The Nationwide says a property located 500m from a station in London attracts a 9.7% price premium (approximately £46,800 based on average prices in London).

A property located 1,000m away commands a 4.3% premium, at 750m this increases to 6.8% while a property 500m from a station attracts the 9.7% figure.

“Our analysis suggests that there has actually been a slight increase in station premiums in London compared with pre-pandemic levels. In 2019-20, a property located 500m from a station attracted an 8.6% premium over a comparable property 1,500m from a station” explains Harvey.

“The Circle line serves the capital’s most expensive areas taking in much of central London and also parts of west London. Average house prices are around £850,000 in areas where the nearest station is on the Circle line.

“Of all the London Underground lines, average house prices are least expensive where the nearest station is on the Metropolitan line. This probably reflects that it stretches towards the outer suburbs, with only a short section in central London.”

In Glasgow – which has the largest network of suburban railway lines in the UK outside of London – buyers now pay a 7.2% price premium (approximately £11,400 based on average prices in the region) over an otherwise identical property 1,500m from a station.

This compares with a 3.5% (£5,200) premium based on those buying in 2019-20.

In Greater Manchester – also well served by an extensive network of railway and tram lines, including the newly-expanded Metrolink – a property located 500m from a station attracts a 6.1% price premium (approximately £11,000).

Greater Manchester and Merseyside Both See 20% House Price Rises

House price growth rates continue to climb strongly in England and Wales with prices increasing by a whopping 20% in both Greater Manchester and Merseyside, according to the latest e.surv Acadata House Price Index.

House prices are up 13.4% on an annual basis with the average house price now standing at £343,658.

The lowest growth has been seen in London where 10 boroughs reported annual price falls.

Richard Sexton, director at e.surv, said: “Overall, we can see the market continues to enjoy the effect of the government’s stamp duty holiday.

“Buyers are still striving to complete purchases in time to benefit from the maximum tax break ahead of the change in June to a tapered deadline.

“Completion prices for transactions funded by both mortgages and cash grew by a startling 13.4% annually in May, and at a national level, prices in England and Wales rose on a monthly basis by some £1,800, or 0.5%.

“However, it is notable that the monthly price increases over the last three months are the lowest since June 2020, probably a reflection of the rapidly approaching end of the stamp duty holiday.

“Regionally, there has been continued price growth across Wales and all nine English regions. Prices performed particularly strongly in the Northwest which achieved its highest rate of annual house price growth, 18.4%.

“Growth in the Northwest is underpinned by activity in both Greater Manchester and Merseyside, where prices are increasing at a staggering annual rate of 20.9%. London and the Southeast have also seen growth, although at a lower level. It should be remembered that London property prices have already experienced a boom in the years following the global financial crisis, a rise not experienced by many other UK regions.

“Our property type data shows there has been a shift in the kind of homes that buyers are looking for. 

“Working from home has encouraged interest in larger homes with gardens outside city centres.

“The demand for flats in central and inner areas of London and other cities has not been as strong as for other types of homes due to lifestyle changes and new working arrangements, alongside the absence of overseas buyers in prime central London due to COVID restrictions. The impact of the pandemic on flats has been amplified by the issues surrounding cladding for mortgage lenders.”