London workers could save themselves a staggering £450,000 (60%) on the cost of a home if they move out of the capital and are prepared to commute an hour each way every day, according Lloyds Bank.
 
It found that towns an hour’s commute from central London, such as Wellingborough, Southend, Sittingbourne and Rugby, have an average house price of £294,903. This is compared to the average of £741,919 for a property close to their place of work in central London (zones 1 and 2).

It’s the equivalent of an average saving of £447,015 – or 60% – on property prices.
 
It pays to commute

Even when taking into account the annual rail cost for a one hour daily commute each way (£4,989), a commuter would have to make the same journey for 89 years for the total rail costs to wipe out the benefit in house prices.

Buying a home closer to the capital can still save you major amounts of money, found Lloyds Bank. Commuters who live approximately 40 minutes outside of central London, including Hatfield, Billericay, Orpington and Reading, could save 48% (£353,000) outside of the city, with their average house price £389,000 and with a lower average annual rail pass cost at £3,534.
 
Even commuters who live just 20 minutes away from the heart of the capital could find it more cost effective, with commuters from towns such as Ilford and Elstree and Borehamwood benefitting from an average house price that is nearly £297,795 lower than in central London.
 
City living

However, commuters to Britain’s second and third largest cities, Birmingham and Manchester, are worse off than those living in the city centre, as house prices are often higher outside the city.

The average house price in Birmingham is around £172,000, but several towns around 40 minutes rail journey away – including Derby, Coventry, Burton on Trent and Leamington Spa – command higher average house prices of £211,661. Commuters from these towns also have to pay almost £2,221, on average, for an annual rail pass.
 
The same applies to a number of towns that are approximately 40 minutes away from Manchester, such as Warrington, Chorley, and Macclesfield, which all have a higher house price (£204,161) than in Britain’s third largest city (£162,214).
 
Andrew Mason, Lloyds Bank mortgage products director, said: “Commuters to London who don’t mind a longer journey between home and work could reap the financial benefits of living outside of the capital.
 
“However the decision of whether to live in the city or further away is not simply a trade-off between financial costs and journey times. Quality of life is also a major factor: family circumstances, better schools, physical environment and homes that offer better value for money also come into the equation.”