From yesterday's Evening Standard: 
Comparing the 10- and 30- minute walk prices suggests about £3,000 per minute saved, which is much higher than £1,300 (here) or £1,667 (here) per minute extra for saving one minute's commute time on the train, but those two figures are reduced because taking the train costs money, so half the £3,000 raw saving is soaked up in ticket prices.
Assuming two commuters per household, one minute's extra each way five times a week, fifty weeks a year = 17 hours. £3,000 on your mortgage @ 6% interest and capital repayments is an extra £180 cost per year, so that suggests that people buying houses in London value their free time at about £10 an hour more than time spent commuting (understandable enough), and this is one of many factors which drive land values.
This is a real life illustration of what Fraggles explained on a more cerebral basis here: for every minute nearer the station, the rent is (say) £180 a year higher, so what the landlord is doing is
a) forcing a lot of people to live a little bit further away from the station (placing a burden on them and robbing each one of hundreds of people of a few seconds a day, for which he does not need to compensate them) and then
b) making his tenants pay £10 an hour for the value of their own time.
Big Green Bills
2 hours ago
11 comments:
"... what the landlord is doing is
a) forcing a lot of people to live a little bit further away from the station (placing a burden on them and robbing each one of hundreds of people of a few seconds a day, for which he does not need to compensate them) and then
b) making his tenants pay £10 an hour for the value of their own time."
Are we meant to take this proposition seriously?
A landlord forces no one to do anything. He offers to supply accommodation and can only make the supply if someone comes along and agrees a price he is willing to accept.
That the price people are willing to pay depends on the value they give to the amenities on offer - including location - is axiomatic, but that doesn't mean landlords force tenants to do anything.
I await your insulting rant - that seems to be your chosen mode of reply to criticism and questioning these days.
Do you not think you have become so obsessed by this issue that it clouds your judgment?
TFB: "Are we meant to take this proposition seriously"
OK, imagine two identical houses, one of them ten minutes and one of them half an hour from the station. and the close one rents for £300 a month more than the other.
Can you tell me what the tenants are paying that £300 extra for if not extra minutes leisure time?
PS, I did not say "what does the landlord force the tenants to pay for" I asked "what are the tenants paying for?". Remember that market-forces are still forces and that if you have market forces and government force on your side, that adds up to a lot of force.
Do people really walk for half an hour to reach their nearest station every day?
BE, I sorely doubt it, but that is why they sell for £90,000 less than one near the station; they are 'marginal' as far as 'access to Tube' is concerned. Logic says if we scrapped planning laws and London just extended outwards, the rental value of land at the very edge would be £nil.
In any event, there aren't many places in Greater London that are half an hour's walk from the nearest train station, I was just taking their figures at face value.
I wasn't disagreeing with you I was just surprised that the Standard thinks there are people who commute but live miles from transport.
I think my five minute trek to the tube is quite enough!!
Can you tell me what the tenants are paying that £300 extra for if not extra minutes leisure time?
It's not just leisure time. I live about 35 minutes walk from my local station which means that what I do is take a bus or taxi.
I presume the 5 minute thing is because people don't want the noise of the station.
(incidentally thinking of buying a Brompton folder as I could pushbike the station each morning and get a return within 12 months).
I'd sooner walk half an hour to work than get on the damn tube!
@Blue eyes: You can also drive to the station.
Re: J Takagi -- Do house prices also go down with distance from the nearest bus route?
@Steven: but some people have to do both!
Fat biggot you are correct. This is all one giant pyramid selling scheme. Get on too late and you will pay higher rents. One cannot live in a vacuum. Thats all.
Excellent chap that fraggle. He dropped by at the tent yesterday for a couple of hours.
"the landlord is doing is a) forcing a lot of people to live a little bit further away from the station."
How do you know? Could it not be that the people who live further away from the station simply do so because there were no houses to rent/buy closer to the station, because others had got there first. (This also applies to point b.)
I used to live and work ten minutes from station each end and regarded those forty minutes as my daily exercise - cheaper than going to the gym.
RS: "Get on too late and you will pay higher rents"
That's a good summary.
B, how do I know? Because it's simple maths and logic.
We start with the centre (whatever that is) and one man builds his house, nobody else wants to live there (or else they already would be doing so) and the rental value is zero, by definition.
Now, assuming that the centre attracts others to want to live there, the next chap builds a house in the next available plot, the rental value of that house is also zero, but this pushes up the rental value of the first house to zero + £X.
So whatever the rental value of a plot, it is always exactly equal to the reduction in rents which others further away from the centre have to accept by being forced to live one plot further away from the centre.
The law of agglomeration is is as immutable as the law of gravity. Air pressure and hence temperature is always highest at ground level, the warm air cannot rise and cool because new air will fall and heat up.
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