As travel times are slashed by Crossrail, house prices in the commuter belt will feel the ‘Crossrail effect’, says Graham Norwood
London’s commuter belt and high house prices go together like bread and butter. But now a new factor, Crossrail, is spreading a little jam on top.
That is because the £16bn high speed Crossrail service – which will run 70 miles from Maidenhead in the west to Shenfield in the east – is set to dramatically shorten journey times to and within the capital, and to boost property prices along the route too.
In fact the process has already happened, years ahead of the service opening in 2018. ‘Analysis of houses within a 10-minute walk of each central Crossrail station shows that values have risen 30 per cent since 2008, outperforming average London prices,’ says Liam Bailey, head of research at Knight Frank.
‘Homes within a 10-minute walk of Crossrail stations which have connections to existing tube, overground or Docklands Light Railway services will particularly benefit’, says Bailey.
For example, Knight Frank forecasts that homes close to Farringdon, Paddington, Bond Street, Tottenham Court Road, Liverpool Street, Whitechapel and Canary Wharf stations will increase in value by up to an extra 1.5 per cent per year between now and 2018 solely thanks to the ‘Crossrail effect’. Those rises are over and above ‘normal’ price appreciation.
Crossrail is kick-starting the regeneration that some areas desperately need. A great example is Tottenham Court Road, a relatively down-at-heel area. Crossrail will ‘breathe new life into the place’ anticipates Guy Meacock of Prime Purchase, the buying agency which is part of Savills. He says two good examples of regeneration are Fitzrovia and Bloomsbury, which had ‘fallen on hard times, occupied more by institutions than people.’
‘This Crossrail hub has justified a major overhaul of existing buildings, both retail and residential, as well as a number of new developments’, says Roarie Scarisbrick of Property Vision, another buying agency. As a result of Bloomsbury’s proximity to Tottenham Court Road, he says apartments may enjoy above-average appreciation.
Another big winner will be the area close to Farringdon station. Centuries ago this patch was best known for its breweries, printworks and jewellery-makers, but it then declined and is now the home of small media firms. Many liken it to New York’s Meatpacking District – once an industrial hive but derelict until being turned into funky homes in the 1980s.
Farringdon is currently not considered to be part of prime central London, but is instead thought of as a fringe location with relatively few homes. But that may well change as loft apartments and funky urban homes are carved from existing warehouses.
‘If I was a betting man I’d buy an old building that’s currently occupied by offices and wait a few years before turning it back to residential as demand increases,’ suggests James Geddes of Private Property Search, the buying arm of Strutt & Parker.
Although the most frequent Crossrail services will run within central London (up to 24 trains an hour will operate between Paddington and Whitechapel with each carrying up to 1,500 passengers, for example), there are property beneficiaries outside the capital too.
Crossrail will bring an additional 1.5 million people within a 45-minute commuting distance of central London and is predicted to increase the capital’s rail capacity by 10 per cent.
Some 200 million passenger journeys will be made each year, using trains travelling up to 100mph above ground and 60mph beneath. There will be 37 brand new stations each with 250 metre platforms – the longest in the UK.
Journey times will tumble and the commuter map will have to be redrawn. Canary Wharf will only be 13 minutes from Bond Street and 40 minutes from Heathrow. Abbey Wood to Liverpool Street will be a mere 17 minutes. Slough will be just 25 minutes from Heathrow and 35 minutes from Bond Street.
Unsurprisingly, analysts are now vying to assess what it means for property values. For example, the CBRE property consultancy has identified that a 10 per cent reduction in commuting time may increase a property’s value by up to six per cent. Imagine what that might mean for those travelling from further flung areas such as Maidenhead, Taplow and Burnham, where journey times to Canary Wharf will be slashed by up to 40 minutes.
Another consultancy, GVA, says Crossrail will ultimately lead to an additional 57,000 new homes being built close to stations. And it claims prices of homes in outer London areas and beyond – specifically those within a 10-minute walk of stations at Ealing Broadway, Southall, Hayes & Harlington, Custom House, Woolwich and Abbey Wood – could be boosted by as much as 25 per cent between now and 2018.
Those living in or near London but not on the Crossrail route should not worry about missing the gravy train. They may be able to enjoy falling journey times and rising property values thanks to the prospect of a new service called, of course, Crossrail 2.
Perhaps it is not surprising that Hackney is already benefiting, even without a date being set for Crossrail 2 to be completed. Latest figures from the Land Registry, which monitors all sales, show that demand has soared and house prices in the borough have risen 14.9 per cent in the past year. This means a typical semi is now over £800,000.
When it comes to living with faster commutes and fast-rising house prices, clearly everyone wants to get on board.