4th September 2013
Commuting into London has become a way of life for about 1 million people, thanks to the extortionate cost of housing in the Capital. But with train fares and house prices rising around the UK, is it still cost effective to move out of London. Consumer journalist Jill Insley examines the pros and cons.
Some people have had no choice: they simply could not afford to buy or rent a home in London. Others who were on the London property ladder have decided to take advantage of cheaper housing in the surrounding counties to upsize or buy mortgage free.
With good reason: in survey after survey, the cost of homes has made London one of the most expensive places to live in the world, let alone the UK.
Properties in prime central London have increased in value by 7% in the 12 months to August according to estate agency Knight Frank, and have enjoyed 34 consecutive months of growth as international buyers have continued to invest. The rises in Greater London are even bigger at 8.1%.
Figures from the dealbook of estate agency Savills which tracks the percentage of buyers from Greater London buying outside the capital, indicate that about the same percentage have moved out of Greater London in the first six months of 2013 as in the whole of 2012.
Those who are still thinking of making their own escape to the country, or at least suburbia, are unlikely to benefit from the biggest gap between London prices and those elsewhere.
Prices are finally starting to rise everywhere in the UK, thanks in part to government initiatives such as Help to Buy and the Funding for Lending Scheme. The average increase in the UK over the last year at 4.6% (according to the Halifax).
A report published in July by Savills said prices in the prime suburbs of London and urban markets in the commuter zone have returned to their pre crunch level with a “flow of wealth” down the A3 corridor into the markets of Cobham, Esher and Weybridge.
Prices in Cambridge, Oxford, Winchester and Bishop’s Stortford – all within an hour of London by rail – have also exceeded their 2007 peak.
But Sophie Chick, from the Savills’ research team, says those who have moved out have concentrated on towns. “If you go rural, you can still find plenty of bargains,” she says.
“Villages are the best compromise at the moment. They often offer all the amenities you need, even train stations, but they still offer good value.”
Things to take into account
Many of the reasons for moving out of London are subjective: only you can decide how important they are. But some of the points below may help your decision.
* Historically over the longer term, with the occasional blip, house prices in London have always increased more than anywhere else in the country. If you want to buy in the country mortgage-free, wait until you have benefitted from this effect.
* The cost of train fares. If you still have to commute to London, how much will it cost you for an annual season ticket? Then multiply that by the number of years you are from retirement, adding a good dollop for inflation.
* Cost of petrol. Unless you move to a village or town that offers everything you need, you are likely to use your car more.
* The cost of oil. If your home is off the beaten track, it may not benefit from mains gas.
* Council tax. A couple of boroughs in London – Wandsworth and City of Westminster – charge the lowest council tax rates in the country. If you are upsizing and/or moving from these areas, your council tax bill could shoot up.
* Moving to counties which still offer grammar schools, such as Kent and Buckinghamshire, may save you school fees, but you will end up paying more for your property.
* Wear and tear on you. In theory an hour and a half’s train journey should a walk in the park compared to an hour crammed on the underground. But don’t forget to take into account the time it takes to get to and from the station, and the stress incurred if the wrong type of snow or leaves stop trains. And unless you are boarding at the start of the route, you are likely to stand all the way.