Is this the end of the commuter belt?

Rising property prices in popular towns and rail fare rises make living in London attractive again, writes Sam Meadows

For years, the commuter belt has been the first choice for cash-strapped or space-starved Londoners. But soaring rail fares and stagnating house prices in the capital could now be turning that situation on its head.

The house price gap between London and popular commuter towns has closed so much that the cost of a season ticket can now tip the scales in favour of living in the capital. For a long time, house price inflation in London had far outstripped the rest of the country, while attractive and relatively affordable housing in counties such as Hertfordshire and Kent attracted city workers to the countryside. But could the end of the commuter belt now be nigh?

While house price growth across the country has slowed, the capital has fared particularly badly: growth fell to a meagre 1.2pc between April and June, outperforming only the north of England. Other parts of the country have experienced bigger gains – East Anglia, for example, saw growth of 5pc in the same period.

To make matters worse for commuters, last week also brought news of more rail fare rises. Prices will rise by 3.6pc in January, pushing the cost of commuting up again. Season tickets from places such as Ebbsfleet, Harlow, Ashford and Luton now cost more than £4,500 – around a fifth of the average UK salary – and experts warn that long-distance commuters who live in places such as Swindon will soon have to spend around £10,000 a year.

These high ticket prices, along with the booming cost of housing in popular commuter towns, means that you are now often better off staying in London. Analysis by

Daily Telegraph, using average house price data from estate agent Savills, shows that London-based workers could save thousands of pounds a year by living in the capital, as opposed to the commuter belt.

Of the top 20 commuter towns around London, a quarter are more expensive, while you can also save money by avoiding Oxford, Cambridge or St Albans. Taking into account monthly mortgage payments on an average property and a rail season ticket, our analysis found that you would be £5,456 a year better off living in zone three in London than in Sevenoaks in Kent; while Oxford would be £2,572 a year costlier than zone four. Meanwhile, St Albans, in Hertfordshire, would be £1,688 more expensive than living in zone three.

Lucien Cook, a director of Savills, said the areas immediately around London had been directly affected by the capital’s price surge, forcing commuters further and further out. “Where commuting tends to have grown the most is at the fringes of the traditional commuter zone,” he added. “There have been markets that have seen some pretty strong growth, and haven’t been left behind by London as much as other areas of the country. That means the housing market in those places is no longer driven by the local market but by commuters. This is happening in places such as Guildford, Winchester and Oxford.”

He said rail links to the capital – and season ticket costs – were very important to those who were thinking of moving out. “I think movers will have to be factoring in the cost of their season ticket,” he said. “The quality of the commute is also important: people looking to move out will check the performance of the rail operators. Given what we’ve seen with Southern Rail, that can have an impact on your quality of life.”

Despite the soaring cost of living in the commuter belt, commuters will still queue up to leave London in the hunt for more space and tranquillity, according to Henry Pryor, a housing market analyst. He said city workers had a range of motivations when they decided to leave the capital for the countryside. “In my experience, not many people move out of London because it’s cheaper. The vast majority of people move out to the countryside because it’s nicer,” he said. “It’s more pleasant, it’s easier to find good schools. There are very few areas outside the M25 where you have to worry about moped muggers. I don’t think we are seeing a sea change in attitudes towards commuting.”

And improving broadband speeds are also driving a surge in “tele-commuting”, according to Mr Pryor. Many people now work in London for two or three days a week and from home for the remainder. This dramatically brings down the cost of commuting, making the countryside an even more attractive option for city workers. If a change in the relative costs does cause more commuters to stay in London, the effect is not visible yet. Estimates suggest that 3.7million workers, around one in seven, spend two hours or more travelling to work each day.

Why are rail fares rising so sharply?

The cost of an annual season ticket into London will rise by an average of £100 in January to £2,840. The annual rise in rail fares is determined by the Government, which bases the increase on the change in the retail prices index, a measure of inflation, in the July of the previous year.

The Office for National Statistics published July’s RPI figure, which tracks the change in the cost of a representative sample of retail goods and services, last week. The RPI rose by 3.6pc so rail fares will increase by the same amount.

Some campaigners have criticised the Government for using the RPI instead of the consumer prices index, which is its preferred measure of inflation for other purposes, and which is generally lower (July’s CPI figure was 2.6pc).

“Commuters across London and the South East have become familiar with the frustration of delays, strikes and engineering works,” said David Sidebottom of Transport Focus, a passenger watchdog.

“Passengers should feel aggrieved if they are paying higher fares next January.”

But Mr Pryor had little time for complaints over the cost of commuting. He said: “I’m getting slightly tired of people whingeing about the cost of rail travel. As a taxpayer I already subsidise their journey quite enough.

“Of course commuters have a vested interest in getting more of taxpayers’ money for rail travel, but they should help to foot the bill.” Additional reporting by Joshua Gottlieb

‘The housing market in those places is driven not by locals but by commuters’