Close, but not too close: How to find a bargain in one of London's commuter sweet spots

Brush up on your Tube station map, pore over the postcodes and you might just strike it lucky, says David Spittles

Living near the Tube is key for many Londoners who want a convenient commute to work. But if you are searching for a good-value property, choose the location with care: you want to be close to a station, but not too close.

Houses, flats and apartments within a five- to 10-minute walk of a Tube are, on average, the most expensive in an area (and dearer than those on the station's doorstep). Prices drop significantly for homes 15 minutes' walk away – typically about 16 per cent – and decline steadily thereafter.

In some areas, the price differences are stark. Beyond the 10-minute "halo", prices in Parsons Green and Twickenham are more than 40 per cent cheaper; in Herne Hill, 26 per cent less and in Oval, 22 per cent, according to analysis by global property adviser CBRE. Jennet Siebrits, head of residential research, says: "By settling for a 15-minute stroll you could, in theory, pick up a bargain."

It's in our veins

The capital's Tube lines are the veins of the city's property map. Properties along the Central line, which covers the core central London area, top the Tube line price chart, but not all of the cheapest locations are in the outer travel zones.

Aldgate and Elephant & Castle, in Zone 1, and Whitechapel, Oval and New Cross in Zone 2, are cheaper up-and-coming areas. Tooting (Northern) and Tottenham Hale (Victoria) are also worth investigating.

One transport quirk is that only 30 of London's 275 Tube stations are south of the river (as most south of the river dwellers will remind you). Indeed, the only line that goes deep into south London is the Northern line. This route is heavily used by young Londoners as it connects cheaper locations both north and south of the river with the main employment centres of the West End and City.

As a rule, properties north of the river are more expensive than those on the south side, though there are some mid-range areas, such as Clapham and Camden, that are comparable in price terms. Transport for London cycle scheme hire docks (which stretch from Lambeth to Hackney and from Southwark to Maida Vale) are also causing property ripples around Tube stations, particularly in more affordable areas on the fringe of the car congestion zone. This is because cyclists can take advantage of the 30-minute free-of-charge period to get to work and back, says estate agent Ludlow Thompson.

Busy, young male career professionals in particular like to be close to a station, with all their day-to-day needs – pub, deli and dry cleaners – on the walk home. "Proximity to a Tube is the single most important factor – a must – for almost every buyer and renter coming through our doors," says Luke Bishop of south-of-the-river estate agent Wooster & Stock.

"Inevitably, this boosts the value of property near stations. Brixton, on the Victoria line, is 15 per cent dearer than neighbouring Camberwell, which has no Tube."

It is also a reason why clever home-hunters and investors try to anticipate new transport links and additions to the Tube network and buy early on in the process. The recent East London Line extension demonstrates that the opening of a new line or station can propel prices.

Some people use analytical research tools such as PTAL (public transport accessibility level), devised by Transport for London, to calculate an address's transport status on a scale of one to six, with A and B subdivisions.

Traditionally, living close but not too close to a station has been the preferred option because station neighbourhoods have had certain downsides – scruffy B&Bs, noisy bars, fast-food outlets, itinerants and the hustle-and-bustle of travellers.

However, a new planning policy born out of environmental concerns requires more homes to be built around and above transport hubs.

Redevelopment of several mainline stations (King's Cross, Paddington, Victoria and London Bridge) is already making a difference by upgrading the "public realm" and adding residential to the usual mix of shops and offices.

East London Line effect

This line through Hackney and south to Croydon has opened up areas previously out of bounds to commute-conscious homebuyers. Yet the East London line remains the Tube route with the cheapest property around it – and therefore still has potential.

Neighbourhood watchers should keep an eye on phase two of the line, which has escaped the Government's public-expenditure axe and will open by the end of next year.

Trains will run along a spur from Rotherhithe to Clapham Junction, stopping at five stations, including Denmark Hill on the Camberwell/Dulwich border. A new, sixth station at Surrey Canal Road in fashionable Bermondsey is planned as part of a major regeneration project that includes 2,500 new homes and a sporting village on 30 derelict acres alongside Millwall FC's stadium. This station would also provide four-minute train connections to London Bridge.

Peckham may get the biggest lift. Away from the town centre are pockets of handsome Victorian housing – around Nunhead Green and in the Belenden conservation area, for example – where middle-class families have settled down.

"The area has reached the stage where people want to live there rather than have to live there as property is relatively cheap," says Becky Munday of estate agent Wooster & Stock.

Look east Dalston

Newlyweds Laura White and Mark Wright, right, paid £385,000 for a new three bedroom apartment in Dalston, which is also the key interchange for a linked overground orbital train network around the capital. This integrated service is intended to funnel commuters entering London from north and south, but heading for the East End and City, away from the main central London railway stations, which are heavily congested. Mark, 49, is an artist based at Cubitt Gallery in Islington who also lectures at Goldsmiths College in New Cross (a short hop on the East London line).

The couple moved from a period house in Stoke Newington. "We were motivated by the transport and neighbourhood improvements. Dalston is young, fast-paced and bursting with creativity, which provides artistic inspiration for both of us," says Laura, 43, a sculptor, who lectures at Loughborough University. The address – Dalston Square, a £160m project above the new East London line station – is effectively a new town centre, with 550 new homes, some with enclosed balconies that can be opened up in summer. Prices from £365,000.

Call Barratt on 020 7241 1833. Values have jumped from under £500 to over £700 per sq ft since the first homes were launched off-plan in 2008. Prices are lower at Queensbridge Quarter, about 10 minutes from the station. A new phase of 72 flats and townhouses has prices starting at £270,000 and £535,000 respectively. Call Fyfe McDade on 020 7613 4044.