For towns within approximately 200 kilometres of London, each 50 kilometres further away it is from the capital was associated with around a £50,000 reduction in average house prices, according to a ONS report into town characteristics and house prices.
It found the three most important characteristics for predicting average property prices in towns were: the distance of the town from London, the types of jobs carried out by the town’s resident workers and the level of income deprivation in the town.
A 10% increase in the number of people employed within job types with the highest skill levels was associated with around a £25,000 increase in price.
Size of town, age profile, region and distance to nearest city had some influence but were less important, while the presence of a university in a town, the proximity of the town to the coast and travel-to-work area classification had little effect for England and Wales as a whole.
Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco, said: “The property market in 2022 is fundamentally different to the market of 2019.
“Though proximity to London remains a driver of prices in 2022, the pandemic has fundamentally changed the rules of the game.
“London will always be the nexus of the UK property market but with the shift to homeworking and the race for space triggered by the pandemic, proximity to the capital just doesn’t count in the way it used to.
“In future analyses, the types of job residents of towns and cities have and the level of income deprivation will likely become more prominent, and we may also see towns that are beyond 200km from the capital start to outperform as the race for space continues.”
Lewis Shaw, founder an mortgage expert at Shaw Financial Services, added: “The new ONS report about house prices tells us something that we already knew, namely the closer your proximity to London, the higher the house prices on average.
“What is striking about this is the extent of how much a role that plays. It highlights once again the imbalance in our economy and the typical London-centric view that pervades our institutions.
“This should be a clarion call to MPs up and down the land that more must be done to reverse this perverse scenario where the rest of the UK is a ward of the city.
“A more decentralised economy over the entire UK would solve almost all our current problems, from health inequality to educational achievement along with crime rates and mental health outcomes, as the data consistently tells us a simple truth: poverty is the scourge of humanity, and if you reduce poverty, you increase wealth and watch as a nation’s ills melt away.”
You can read the full report here.
