I bought a £130,000 Birmingham house but spend £10,000 a year commuting to London

Muhammed Khan found buying a home anywhere near London impossible, so he packed up with his family and moved to Birmingham after purchasing a property for £130,000. The move, he said, allows him to save an estimated £500 to £600 a month in mortgage and other living costs compared to if he had bought in the capital, even after spending around £830 every month commuting to London five days a week for work. For the 36-year-old IT manager, the trade-off has been worth it – but new research shows not all workers who made similar moves during the rise of hybrid working are content with what it has meant for their money. Shorts Research from Standard Life found one in six UK commuters moved further from their workplace during the shift to hybrid working. Although More than half, 53 per cent, say they now feel financially better off, 43 per cent say any extra money is being absorbed by everyday spending rather than boosting their financial future. Khan previously rented a flat in London from his friend for £950 per month where he lived with his wife and six children and said his total monthly spending was around £2,500 to £3,000. He previously looked at buying in London, where he had lived for six years, but decided the costs were too high. “I did not have a particular alternative location in mind at first, but I had family in Birmingham and found that property prices there were much more affordable,” he said. Khan eventually bought a house that had originally been listed for £150,000 after having an offer of £130,000 accepted. After his deposit and other fees were taken into account, he took out a £70,000 mortgage, with his initial repayments costing around £550. To compare, according to Rightmove, house prices in the capital had an overall average figure of £656,255 over the last year. The majority of properties sold in London during the last year were flats, selling for an average price of £500,861. But Khan’s savings on property price have come at the cost of a lengthy – and expensive – commute. He added: “My train travel costs around £750 a month, and I spend a further £80 a month travelling by bus between the station and my office. That brings my regular commuting costs to approximately £830 a month. Khan generally commutes five days a week and said it can take two and a half hours each way. “The cost is still manageable and, overall, I believe the move is worthwhile,” he said. But higher fares or a need to come to London more frequently might cause him to “review” the situation, he said. Travels costs eating into savings Khan’s experience reflects a wider trend emerging as hybrid working evolves. While moving further from major cities can deliver substantial savings on housing, those gains can quickly narrow once regular travel is taken into account. Standard Life estimates someone moving from London to Devon could reduce their mortgage repayments by around £20,500 a year, but a two-day-a-week flexi season ticket from Exeter to London costs more than £18,000 annually before adding parking, childcare and food costs. Unlike many of those surveyed, Khan said he has been able to use some of the savings from his move to improve his family’s longer-term finances. He explained: “My overall costs are lower than they were when I lived in London. My household bills are lower, and I have also found that some of our everyday spending, including food costs, is slightly more manageable.” He is also paying more into his pension as a result of the saving, and has opened a private pension too. “Together, these changes have helped me feel more confident about both my family’s immediate finances and our longer-term future.” Mike Ambery, retirement savings director at Standard Life, said many people who relocated during the hybrid working boom were now having to reassess the financial case for moving. He said: “Flexible working has given people the opportunity to rethink where they live, and many have seen clear lifestyle benefits – particularly in terms of space and overall quality of life. “Those decisions were often made when remote working felt like a permanent new normal, and as expectations around office attendance continue to shift, some of the financial benefits may now be coming under pressure – particularly if commuting becomes more frequent and costs remain high.”