That’s according to new analysis from the Office for National Statistics ‒ based on data from 2019 ‒ which found that for towns within approximately 200km of the capital saw prices drop by around £50,000 average for every 50km further away they were.
The relationship was confirmed as towns located around 18km from London had average house prices of £416,800, dropping to £359,000 for towns 50km away, £288,500 for towns 100km away, and £241,000 for those around 150km from London.
The ONS suggested this distance threshold may represent the furthest people are able to commute to work in London.
The other crucial characteristics influencing property prices were the types of jobs carried out by locals, and the level of income deprivation within the town itself.
A link was found between house prices and the percentage of people in the town employed in higher skilled jobs. Using the skill levels defined within the UK Standard Occupation Classification, for every 10 percentage points of people in jobs in skill level four ‒ classed as those in professional occupations and high level managerial positions ‒ the ONS found average house prices increased by around £20,000.
There was also a strong negative trend, with the proportion of residents employed in skill level two jobs. These include professions such as machine operation, retailing and clerical jobs.
The ONS found that for each 10 percentage point increase in local people working in skill level two jobs, average house prices dropped by around £20,000. However, it noted that this link weakened when higher numbers of people in the town were employed in these jobs.
Rounding out the top three was income deprivation, which the ONS said had a “strong” link with house prices. It found that the average property price dropped by around £10,000 for every five percentage point increase in deprivation level.
The pandemic has changed the game
Andrew Montlake, managing director of Coreco, argued that the property market today is “fundamentally different” to 2019, noting that while proximity to London is still important, the pandemic has “changed the rules of the game” when it comes to prices.
He continued: “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.”
Montlake suggested that in future, towns that are a greater distance from the capital may begin to outperform “as the race for space continues”.