London workers who have moved to commuter hotspots to escape the capital’s inflated house prices may not be saving as much as they think.
That’s according to new research by estate agency haart.
It found that around half of the average savings made from moving out of the capital are eaten up by train fares.
The analysis of 14 commuter hotspots shows that, on average, people save £10,779 a year by moving out of London. But they then spend £5,160 a year on train fares to get to work in the city. Annual season tickets went up by an average of 3.1% last week.
Losing money
The study found that university cities Cambridge and Oxford were actually more expensive to live in after season ticket fares were taken into consideration.
Commuters living in Oxford were found to be more than £2,100 worse off, while those in Cambridge were £430 out of pocket despite the cheaper house prices available in those areas.
Oxford has an average house price of £386,191 and Cambridge £362,387. That's far less than the average cost of a London home at £437,000.
The annual mortgage savings in Oxford came to £2,540 and in Cambridge £3,730. But these small gains were wiped out by the annual cost of a season ticket, which from Oxford (to Paddington) came to £4,672 and from Cambridge (to London King's Cross) came to £4,160. So instead of making an annual saving, commuters in these areas are likely to have made a loss.
Leamington Spa was another area where savings were hugely impacted by fares. Commuters in the area have to shell out over £7,000 for a season ticket to Marylebone. So although commuters made a £9,387 annual mortgage saving, 78% of it was used getting a ticket to work leaving an annual saving of just £2,043.
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Bargain spots
However, other areas like Southend, Southampton and Grantham still provide a sizeable saving, estimated to be over £8,000 a year.
[SPOTLIGHT]Commuters that buy a home in Southend in Essex make an annual mortgage saving of £11,840. After the cost of commuting to Liverpool Street Station is taken into consideration (£3,236) people here end up with an annual saving of £8,604.
The commute from Southend to Liverpool Street takes around one hour and ten minutes at peak time.
Southampton commuters racked up the second biggest saving of £8,600. House prices in this area were found to be over £20,000 cheaper than Southend, but the cost of the commute into Waterloo was slightly higher at £4,308.
The rush hour journey from Southampton to Waterloo takes around one hour and twenty minutes.
Grantham in Lincolnshire was the third best place for commuters in search of a saving with an average of £8,264. The area had the cheapest average house prices out of the 14 hotspots in the study at £136,513 and making an average mortgage saving compared to a London home of £15,024.
Commuting from Grantham to King’s Cross takes one hour and 15 minutes.
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How much does commuting save?
Below are the full results from Haart which analyses just how much commuters in 14 key hotspots are actually saving.
|
Commuter towns/cities |
Av regional property price* |
Av London property Price** |
Annual mortgage saving*** |
Cost of a season ticket |
Av annual saving |
|
Southend |
£200,193 |
£437,000 |
£11,840 |
£3,236 (to Liverpool Street Station) |
£8,604 |
|
Southampton |
£178,822 |
£437,000 |
£12,908 |
£4,308 (to Waterloo) |
£8,600 |
|
Grantham |
£136,513 |
£437,000 |
£15,024 |
£6,760 (to London King’s Cross) |
£8,264 |
|
Aylesbury |
£203,678 |
£437,000 |
£11,666 |
£3,732 (to Marylebone) |
£7,934 |
|
Colchester |
£186,854 |
£437,000 |
£12,507 |
£4,680 (to Liverpool Street Station) |
£7,827 |
|
Rugby |
£174,611 |
£437,000 |
£13,119 |
£5,440 (to Euston) |
£7,679 |
|
Milton Keynes |
£202,609 |
£437,000 |
£11,720 |
£4,772 (to Euston) |
£6,948 |
|
Farnborough |
£229,373 |
£437,000 |
£10,381 |
£3,568 (to Waterloo) |
£6,813 |
|
Swindon |
£162,733 |
£437,000 |
£13,713 |
£8,000 (to Paddington) |
£5,713 |
|
Reading |
£246,676 |
£437,000 |
£9,516 |
£4,088 (to Paddington) |
£5,428 |
|
Norwich |
£179,994 |
£437,000 |
£12,850 |
£7,480 (to Liverpool Street Station) |
£5,370 |
|
Leamington Spa |
£249,255 |
£437,000 |
£9,387 |
£7,344 (to Marylebone) |
£2,043 |
|
Cambridge |
£362,387 |
£437,000 |
£3,730 |
£4,160 (to London King’s Cross) |
-£430 |
|
Oxford |
£386,191 |
£437,000 |
£2,540 |
£4,672 (to Paddington) |
-£2,132 |
*Average regional property prices have been taken from Rightmove
**Average London property price according to the ONS
***Difference between average London and average regional property prices based on a 5% mortgage.
How to cut costs
One way you could save on rail fares is by taking a coach instead of a train. It’s a longer journey but the savings are significant. Read: Rail fares rise 4.1%: can you cut costs by taking the bus instead?
If you can’t face traveling for any longer than you need to, see if you can get a season ticket loan from your employer as this ensures you're able to take advantage of the discount for buying for a whole year's travel up-front. You could also get cashback on the cost of your ticket by using a cashback credit card.
But apart from trying to drive down the cost of your ticket, you could look into cutting the cost of your mortgage instead. A better rate could shave hundreds off your monthly repayments.
Head over to our mortgage centre to compare the latest deals.
More on travel:
The top ten money-saving travel apps
The best and worst airlines to travel with
How to claim a refund on your train tickets
The best credit cards to use on your travels
Government introduces new train fare price rise cap