Buying a home is an emotional decision. But by taking into account proximity to Tube stations, schools, even supermarkets, and throwing in some park views, you can start to quantify exactly how the value of your property stacks up, according to a new raft of statistics.
We all know that the closer you get to central London, the higher the property prices. But recent research by Wetherell, a Mayfair estate agency, highlights the precipitousness of the “price cliffs”.
For every minute you spend on the three Underground stops between Earls Court and Sloane Square, property prices rise by £96,647. Travel the three stops from Southwark to Green Park and prices increase by £152,640 for every minute of the journey. Or take the train from Vauxhall to Green Park – a seven-minute hop – and the average property will cost an additional £229,286 at every stop.
“You can see the price plateau of the prime central London areas and the ‘fiscal cliff’ as prices drop away. It’s particularly striking just east of the Northern Line’s Charing Cross branch where values to the west average more than £1m, but to the east can be half that amount,” says Wetherell’s managing director, Peter Wetherell. He has worked with Dataloft property consultancy to produce the first London Underground property map based on sales and rental values of two-bedroom flats within a quarter of a mile of the 63 Tube stations in zone 1.
“It shouts at international investors that if they are looking for prime that they should be north of the Thames and stay within zone 1. I think Mayfair looks particularly good value,” says Wetherell. “It also makes these other Tube locations great value. The ‘price hike per minute’ figures show people that you can buy comparative value in the cheaper priced areas but still enjoy the urban lifestyle and look forward to price growth and gentrification of their neighbouring area.”
Even for those with a fleet of Ferraris in the garage, proximity to a Tube station can determine which property they buy or reject.
“It seems paradoxical, but the Tube is disproportionately important to those who you would think would be above these pedestrian requirements. Being close to the Tube means their army of domestic staff can walk and take public transport, so the chauffeur doesn’t need to drop them off,” says Trevor Abrahmsohn, managing director of Glentree International, which regularly sells properties on Hampstead’s billionaire strip, The Bishops Avenue.
“It’s a very desirable and prestigious road, but the truth is, if you want to go from Hampstead to the City or Canary Wharf, the most efficient method is by Tube,” he says.
“There are also three apartment blocks on the street and you struggle to sell flats to European buyers in the two furthest from the Tube, whereas flats in the one right next to the Tube are of great interest to local buyers.”
Connectivity – the relationship between public transport and house prices – has also been on Savills’ radar. It calculates that location within a five-minute walk of a Tube station can add up to 20 per cent to a property’s value or rental price.
“We now sell many new developments without off-street parking and no possibility of obtaining a parking permit. Good connectivity to a station and car-share schemes makes dinosaurs of those schemes with their own parking in some locations,” says Robin Chatwin from Savills’ Wandsworth office.
For those prepared to take on a longer commute, the price of four-bedroom houses falls dramatically – from an average of £1.2m compared with just over £500,000, says Savills – between zone 2/3 stations and commuter towns 20 to 30 minutes by train from London such as Sevenoaks, Beaconsfield or Guildford.
“It’s enough of a difference to fund major family commitments such as school fees or a London bolt-hole that would make it easier to maintain links with the capital,” says Sophie Chick from Savills’ research department. She adds that if buyers are prepared to extend that 20-minute commute to 80 minutes, a four-bed family house will cost on average £2,482 less per commuter minute of your journey.
The cost of the school commute – or, more likely, two-minute walk, if you want to ensure you are in the catchment area – can also be quantified. Nationwide has found that a school’s exam success has a direct bearing on property values, with a 10 per cent higher SATs attainment equating to a property price premium of 3.3 per cent.
The rental statistics website Rentonomy has similarly found that renting near the best performing schools in London will cost 30 per cent more than renting near lower-performing (but still good) schools.
“In Battersea, we have recently had two very similar five-bedroom houses on either side of the same street. The one in the catchment for highly desirable Honeywell school was valued at £1.2m. The other, not in the catchment, sold for £1.11m,” says Peter Rollings, chief executive of Marsh & Parsons.
Leisure activities have their own value, too, and proximity to a park can raise property prices. For views over green space in London, a buyer will typically pay up to a 30 per cent premium, according to Savills.
At the top end, properties overlooking Hyde Park, “particularly popular with Russian and Middle Eastern buyers,” says Alex Christian from Savills in Knightsbridge, cost 20 per cent more than those without green views.
One listed six-bedroom townhouse that Savills is marketing in Brompton Square in Knightsbridge – London’s most expensive Tube station, according to Wetherell’s property map – can claim 30 per cent of its £27.5m price tag because it has direct access to Hyde Park, the garden square and Holy Trinity Church gardens.
Higher value properties in south London also cluster around parks or what Savills call “green fingers” – leafy streets that span out from commons. Wandsworth’s expensive “toast rack”, a grid of streets that includes Dorlcote Road and Henderson Road, is a prime example.
On a map showing the relationship between property prices and green spaces, produced by Neal Hudson, Savills’ associate director of residential research, the £1m-plus properties are noticeably concentrated around parks in areas such as Greenwich and Dulwich.
Rents, too, increase significantly if you live near a park. Properties within 0.5km of a park average £400 a week in London. A further 0.5km away, you will pay 25 per cent less, estimates Rentonomy.
Where you shop also has a cost implication that goes far beyond what is in your trolley. The opening of a Waitrose store is widely seen as an indication of an affluent area.
Countrywide, properties located within the same postcode as a Waitrose outlet are on average 25 per cent more expensive than the average in their county, according to research by Savills. “The location of a Waitrose store seems to signal a strong, rising housing market,” says Savills’ researcher Sophie Chick.
Rentonomy has found rents to be highest near a Waitrose store ahead of any other supermarket in London, with an average two-bedroom property costing £430 a week compared with £400 close to a Sainsbury store and £320 near a Tesco.
“London’s pockets of high value have some key features in common. They will all pass the pint test, which means being within walking distance of both milk and beer. A mix of tenure is also good for a sense of community, the buzz of a location and, in turn, property values,” says Yolande Barnes, Savills’ head of world research. “But the two real generators of value are green space and access to public transport,” she says.
Thankfully in London, one is never too far from either.