Expanding towns adjacent to rail stations – myth over substance

The government has decided that building new dwellings near railway stations is a good idea. One reason given is that people are being priced out of housing.  Yet house prices are not high due to a lack of supply so anyone thinking these new dwellings will somehow be cheaper is deluding themselves and the general population.

 

Anyone hearing or reading about this could be forgiven for thinking that such rail links would enable residents to travel to major cities for work in a sustainable way. After all what could be more environmentally desirable? A short trip to the rail hub and then zoom off to that well paid job. Ticks all the boxes for sustainability and economic growth. Who could object – not even the bats and newts!

 

But It turns out its all based on a rather large myth.  Far from rail travel being a major or even significant element of travel in such towns it is minimal, instead the main mode of transport is the car.  The 2011 figures are more relevant as the 2021 figures were affected by covid lockdowns.

 

% travelling by rail
		2011	2021
Abingdon	Cambridgeshire	1.6	0.5
Great Shelford	Cambridgeshire	5.3	1.2
Biggleswade	Bedfordshire	7.9	2.7
Ivybridge	Devon	0.9	0.2
Farnborough	Hampshire	6.8	1.9

[Source, Census 2011, census 2021].

 

So even if we take the most optimistic figure (for Biggleswade) it would mean that if a town doubled its population by developing land adjacent to the rail hub, for every 1,000 travelling by rail 9,000 would travel by car!  A new road perhaps?

The housing crisis the real cause – the multi-causal theory 

 This discourse is more nuanced, essentially dismissing the supply as a major cause and instead is based on an understanding of how changes in housing finance policy, the relationship between interest rates and asset values and the effect of earnings on prices. We could call this the multi-causal theory or approach as it incorporates the various elements that determine changes in house prices and values and impact on affordability and access to housing. 

 

 

Why have house prices increased so much?

Deregulation.  Keen, 2025; Ryan-Collins, 2024.

Houses are different to most ‘goods’ in that they both provide a service – somewhere to live and are also an asset.  Lewis and Cumming, 2019; Miles and Monro, 2020; Mandelkern and Oren, 2025.

Investors purchasing property.  Ryan-Collins, 2024.

Growth of the Buy to let market.  Hamptons, March 2025. 

Earnings, Hantzsche, and Jeanes, 2025. 

 

Summary

As the multi-casual theory explains there are a number of elements, which together contribute to the rising house values. These are deregulation, increasing asset values as interest rates fell, quantitative easing and higher earnings.   Again changes in supply are not regarded as playing a significant role contrary to the views and assertions of many commentators and politicians. 

 

Conclusion

The idea of expanding towns around rail hubs/commuter stations is designed simply to meet the government’s targets, which are based on dubious assertions about housing. Any urban developments associated with rail hub schemes would be just developments like any other.  It is another example of government policy of growth for growths sake.

 

There are two other problems with the idea. One is that it takes no account of the use of land, which is currently being farmed or providing environmental services. The other problem is that it rests on the idea that we should encourage people to commute to larger cities for work. This is an outdated concept – it would be far better to ensure that localities are more self-sufficient both in terms of jobs and facilities.