Londoners Pay $31,000 Premium for Homes Near Subway or Railway Stations

Londoners pay an average premium of 20,300 pounds ($31,000) for a home within easy reach of a subway or railway station, Nationwide Building Society said.

Properties located within 500 meters (547 yards) of a stop will cost on average 7.2 percent more than an identical home 1,500 meters away, Britain’s biggest customer-owned lender said in an e-mailed report today.

Homes nearest a station on the Circle Line of London’s subway network, also known as the tube, have the highest average price at almost 500,000 pounds. Those nearest the Central Line, which serves some of East London’s least expensive areas, have the lowest at 275,000 pounds, Nationwide said.

“One might expect those buying property in the capital would prefer to live close to a tube or train station and be willing to pay a premium for this,” Nationwide’s Chief Economist Martin Gahbauer said in the report. “Whilst homebuyers would prefer to live close to a station, it becomes less important once outside easy walking distance.”

The premium to live near a station falls the further away a property is, with those located 750 meters commanding a 5.2 percent premium and those 1,000 meters away a 3.4 percent premium, Nationwide said. Nationwide used data from its mortgage lending in Greater London in 2009 to calculate the results.

Luxury-home prices in central London are increasing in value at twice the U.K. average as a decline in the pound leads overseas buyers to shrug off higher taxes and seek bargains in the most expensive areas, Knight Frank LLP said on July 2.

To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net

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