In January Gartoo researched the combined house and commute costs of areas around London to try and find the optimum location for someone working in central London to live, the results were staggering.

Every five miles nearer to Bedford one lives from St. Pancras a monthly average saving of £515 is made on combined mortgage repayment and commute costs.

Moving from Camden to Potters Bar – an added journey time of 17 minutes a day – could save £1,234 per month in combined travel and mortgage repayment costs.

So why do people still choose to live in non optimum locations such as Camden?

Londoners are irrational

One very clear point that was highlighted by our results was that people’s home purchasing decisions are far from rational. For example, out of the towns sampled Richmond turned out to be the worst value area near London where the average three-bedroom house price is £703,000 and a commute into Central London takes 53 minutes.  A rational home hunter working in Central London would nowadays buy a house in Stratford because the area is the best value spot: the average three-bedroom house price is £262,000 and a commute into Central London takes 16 minutes.

To illustrate the comparison of the different areas sampled we produced a visual representation comparing commute cost, commute time, distance and average mortgage repayment cost – click the image above to open the full visualization in a new window.

So where’s the best value area to live?

Whilst it can be financially sensible to commute long distances to London, the trend of increasing travel costs above inflation and the increasing travel times are quickly closing the gap to the cost of living in London. Our research concluded that Bedford and Stratford are currently the two best value areas in terms of the relative cost of housing versus travel time, but whether these areas will continue to be the best value in the next year or even six months is uncertain, particularly with the 2012 Olympic developments occurring in Stratford.

In an attempt to try to see whether this trend occurred in other cities or just London we collected the same data for the UK’s second and third largest cities – Edinburgh and Birmingham. Interestingly, we noticed a similar pattern but on a far smaller scale – On average, a total saving of £133/month is made every 2 miles from the centre’s of Birmingham and Edinburgh, but only in a single direction, which is due to the Hoyt urban land use model on which both cities were built upon.

Click here to view the full report of house prices and commuters data.