How to save £450,000 off the price of a house
The GU6 postcode area, which includes Cranleigh and surrounding villages, has an average property price of £314,862 over the past three months.
This compares to an average for England of £181,619, according to the latest Land Registry House Price Index.
So it costs £133,243 or 73% more than the national average to live in Cranleigh.
It gets worse of course if you live in central London, where average house prices are currently £722,000.
According to new research from Lloyds Bank, there’s a relatively simple solution to house price affordability, assuming you are willing to spend some time on the train.
Commuters with up to an hour’s rail journey to London save, on average, £450,000 (or 60%) on the average house price compared to those living in central London, according to the research.
Towns an hour’s commute from central London – which include Crawley, Newbury, Colchester and Chatham – have an average property price of £272,000: a significant contrast to the average of £722,000 for a property close to their place of work in central London (zones 1 and 2).
In contrast, the average annual rail cost of £4,944 from these areas in the ‘one hour zone’ is relatively small, and means a commuter would need to travel for 91 years for the total rail costs to wipe out the difference in average house prices.
Of course it’s not all about money.
Spending an hour each way on a daily commute (assuming no overrunning engineering works, industrial action or other transport disruption) means giving up at least ten hours of your life each week; or 480 hours in a typical working year.
That’s less time to spend with your family. Less time to enjoy that cheaper property. Less time to invest in your career development and passions.
When we examine different life options on paper, the answer is often clear.
In this case, the option to buy a house in the one hour commuter zone and save £450,000 seems quite simple.
But choosing what is best isn’t always about what looks best on paper.
Financial Planning is increasingly about choosing life over money.
We all have to make important choices from time to time, giving priority to different aspects of our lives.
There’s a lot of talk about work/life balance, which in reality is often one and the same thing; our work lives and entwined with our actual lives in the majority of cases.
Where Financial Planning can play such an important role is to ensure we can support our goals in life financially, without having to make compromises or make career decisions which detract from our overall happiness.