So what happens...

Graham_Devon

...When commuter towns become too expensive for commuters?

As is happening in Southend on Sea at the moment, which posted a 15% increase in house prices over the last year as commuters move further out of London looking for affordable housing.

This, as the article suggests, has knock on effects to the cost of travelling to work.

What the article doesn't mention is the cost it has on your health, stress levels and family.

http://blogs.telegraph.co.uk/finance/ianmcowie/100021948/house-prices-commuter-suburbs-catch-up-with-capital/

Could London price out it's workers completely within a few years? Especially considering the pace of increases in travel costs.

thorsoak

In 1963, new 3-bed semi cost £3,250 with mortgage cost £20.5s.6d (6.125% interest).

Weekly season ticket from Southend Central to Fenchurch St on LTS (otherwise known as the Misery Line) was £5.12s.6d.

Weekly salary was £19.18s.6d.

We moved there because houses were cheaper by £500 than the corresponding properties in Reading.

Today the LTS line is now C2C, and is the most reliable commuter route in the UK - last year it came a close second in reliability to the Swiss Trains. This is going to increase the desireability of the area.

dtsazza

Graham_Devon wrote: »

Could London price out it's workers completely within a few years? Especially considering the pace of increases in travel costs.

Almost certainly not.

If housing/travel costs meant that it wasn't feasible for people to work in a particular London job for e.g. £30k salary, then almost certainly the company would respond by paying £35k to tempt people back.

This is just a single contributing factor to the overall supply and demand that drive prices (in this case, for jobs). But it's not inherently special, factors are changing all the time.

The only exception would be if the job was uneconomical for the company at £35k, so they wouldn't offer a pay rise - and it was uneconomical for the worker at £30k, so they would no longer take the job. In this case the job would cease to exist, as it would be something that no longer created a net benefit to both parties. However, I don't think we're anywhere near that point for the job market in general. And I suspect that if we were to get near that point, the shifting factors that caused it would also have increased demand elsewhere, thus transforming the market into other jobs, rather than destroying it.

moneyinmypocket

I don't see it happening graham

diable

I wouldn't call Southend on Sea "desirable" and London will always be a magnet for workers who want to live in London.

mystic_trev

Graham_Devon wrote: »

Could London price out it's workers completely within a few years? Especially considering the pace of increases in travel costs.

London doesn't operate like other places in the UK. Most of the people that work there will get pay deals that reflect the increases in traveling costs etc.

GeorgeHowell

diable wrote: »

I wouldn't call Southend on Sea "desirable" and London will always be a magnet for workers who want to live in London.

Nor would I, but many would. Apart from the seafront area it's just like an outer east London suburb transported thirty miles away. Many, of a "townie" (not TOWIE) disposition, like to live in that kind of environment.

MacMickster

I think that there are many signs that we are going the way of the Japanese. Although the property market in Japan crashed badly 20 years ago, property prices in the major cities remained out of reach for most people.

As a consequence, a 2 hour commute is now regarded as the norm for all but the best paid employees working in the major cities.

HAMISH_MCTAVISH

Graham_Devon wrote: »

So what happens...When commuter towns become too expensive for commuters?

They stop getting more expensive.

But that's obviously not happening here.

Always remember Graham, just because the average person is priced out, it doesn't mean all people are priced out, and when you have a shortage of housing as we do then only the higher earners need to be able to afford to buy in order for prices to stay level or rise.

Or as has been repeatedly pointed out to you.... When you only build 30% of the houses you need, then only the top earning 35% need to be able to afford them in order for prices to rise.

As is happening in Southend on Sea at the moment, which posted a 15% increase in house prices over the last year
.

When things reach the limits of affordability, they stop getting more expensive.

(Of course things can also stop getting more expensive for other reasons, like dysfunctional lending markets or artificial mortgage rationing, but that's not what we're discussing here....)

somethingcorporate

diable wrote: »

I wouldn't call Southend on Sea "desirable" and London will always be a magnet for workers who want to live in London.

There is always a compromise.

Spend £250k for a 1 bed/studio pokey hole in London and spend 40+ mins on a tube commuting or spend £250k on a nice house with a garden, near the sea, and commute an hour overground into London?

We chose the latter and did it for 3 years from Southend. Loved living there and wouldn't live in London for any amount of money.

Loads of people in London had a massive mental block when it came to having to come in from far away but they often didn't realise the irony of them having to spend just as long commuting but since it was on the tube map it made it normal. Still, a 5 minute walk from the sea and a house 3-4 times the size of theirs often opened their eyes when they came to stay.

It's only natural that as London starts to price out everyone it will put an increased demand on other local places.

Thrugelmir

Graham_Devon wrote: »

What the article doesn't mention is the cost it has on your health, stress levels and family.

Takes an hour to get from Southend to Liverpool Street on the train.

Is it that bad?