Off the rails – tube house prices fall 11% since start of Covid

House prices surrounding London’s tube stations have fallen by an average of 2% since the start of the pandemic as the work from home trend causes them to lose importance with homebuyers.

Lettings and estate agent Benham and Reeves analysed house price data across all London postcodes home to an Underground station and how they have changed between December 2019 and now.

Properties within close proximity to a tube stop currently average £642,674, down on the previous average of £655,017 seen pre-pandemic.

However, this decline is higher when dissecting the London Underground by line, with the Waterloo and City line seeing house prices surrounding both of its stations fall by an average of 11%.

The average property price in the vicinity of the Circle Line has fallen 7% since the start of the pandemic, while the Northern, District and Hammersmith and City lines have all seen a drop of 4%.

Similarly, the average house price has fallen along the Jubilee (2%), Bakerloo (1%) and Piccadilly (1%) lines, while house prices have remained largely static across the Metropolitan and Central lines, as well as the DLR.

Conversely, just the Victoria line has seen house prices climb since the start of the pandemic, up by 2% on average along the route.

This decline has been largely driven by the growing trend of working from home, which looks set to continue and could well intensify tube station property price falls.

Marc von Grundheer, director of Benham and Reeves, comments: “What a difference a year makes and who could have predicted that we would still be largely working from home almost a year on from the first lockdown.”

“Although the London market has largely held its own despite continued pandemic uncertainty, the ongoing advice to work from home has had a clear impact on the price paid for homes within close proximity of a London Underground station.”

Separate research from the agents has found that 38% of London homebuyers no longer find living near a tube stop important as they now work from home most of the time, while 30% still find it important, but not as important as it was prior to the pandemic.

What’s more, 57% wouldn’t pay more for a property because it was located near a tube station and the majority that would (62%), would only pay up to £5,000 more.

Grundherr adds: “Prior to the pandemic, a tube adjacent property really was the golden ticket for many London homebuyers and, as a result, they commanded a pretty premium compared to those less conveniently located.”

“However, the importance of a quick commute has fallen, bringing property values surrounding tube stations with it. With 2021 also starting with a string of lockdown restrictions in place, the likelihood is that tube house prices will continue to cool, until such point that normality returns and we can once again return to the workplace.”

He concludes: “Of course, once this happens, a sharp recovery in property values will no doubt follow and so the current landscape presents the potential of a very good investment for those in a position to buy now.”