David Alexander comment: Opting for a lower mortgage or longer commute

It all boils down to individual choice and the state of household finances, says Alexander. Picture: contributed.
It all boils down to individual choice and the state of household finances, says Alexander. Picture: contributed.
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It says something about our psyche that while many Scots were pillorying Maggie Thatcher for running down coal and manufacturing industries, her government was pouring millions into the regeneration of Glasgow city centre.

By that I mean the modernisation, through new-build and refurbishment projects, of the city’s office core, which brought inward investment, particularly from the financial services sector, leading to thousands of permanent new jobs. These developments probably also helped save the commercial heart of Glasgow from the deterioration caused by the “flight to business parks” that have so badly damaged some other post-industrial cities.

Of course, Glasgow on its own had much to offer in terms of a skilled and eager workforce, a good locational environment and national and local transport connections. The City Council too played an admirable part in making Glasgow attractive to businesses, but a substantial element of public money – authorised by the “hated” Mrs Thatcher – must have had a role to play in encouraging construction projects and attracting new employment.

Glaswegians, however, were not the only ones to benefit as the extensive suburban rail system made it possible to commute to jobs in the city centre from the likes of Paisley, Dumbarton and Motherwell.

Nowadays, these towns are not only inhabited by locals, whose families have lived there for several generations, but newcomers who have relocated based on the balance of property costs and access to employment, a factor in interesting research recently published by Bank of Scotland. It claims that the average house price in Paisley is £124,319, which is £50,369 lower than the average for Glasgow city compared to an annual rail season ticket for journeys between the two locations of £872. Motherwell, Greenock, Linlithgow and Stirling appear to offer less value; not only is the commuting time longer and the cost higher but the average house price quoted is £156,874 or 10 per cent lower than Glasgow. I am a bit wary about the latter figures as average house prices in Linlithgow and Stirling must be more than in Greenock and Motherwell but they are probably reasonably accurate in terms of pointing towards a trend.

Meanwhile, if you are a WIGLIE (works in Glasgow, lives in Edinburgh), the figures point in the other direction. With the average cost of a house in Edinburgh being £227,525, this is 50 per cent more than in Glasgow – and the rail commuter will pay over £3,000 a year for a rail season ticket.

For those living within a 60-minute commute of Edinburgh, the average saving (on house prices in the capital) is just over £82,000, with the annual rail fare costing £2,299. Perhaps surprisingly, average prices are only slightly lower in those towns with a 30-minute commute to Edinburgh although house prices are still substantially lower at £80,671. I stress that these are only “average” – eg there will be a real difference in prices between North Berwick and Bathgate.

What the research does make clear is that in almost every case, commuting for work to either Edinburgh or Glasgow (rather than living within the boundaries of each city) can produce substantial savings over ten or even 20 years, even with the cost of rail travel.

Many of those who commute from outlying towns would probably prefer to live closer to their workplace in the cities but are deterred not just by the cost of housing in the latter but by the size of deposits (ie the dearer the house the bigger the down payment), especially first-time buyers. Basically it all boils down to individual choice and the state of household finances. Some believe that the benefit of a short commute to work and having all the amenities of Edinburgh and Glasgow almost on their doorstep is a price worth paying; others will take the opposite view, either by desire or financial necessity.

But of one thing we should be glad of – at least there are jobs to go to.

David Alexander is MD of DJ Alexander.