Property Blog and News / Crossrail house price increase for landlords & homeowners

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Crossrail house price increase for landlords & homeowners

9 February 2015

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OnTheMarket
Property Expert

House prices set to soar as London’s commuter-belt expands and drastically reduces commuting times.

There was a time when the price of your commuter-belt house was determined by how close to the centre of London you lived. But all that is changing. Property values will also be dictated not just by how many miles away you live from Marble Arch or Trafalgar Square, but also by how many minutes it takes you to travel into town by train.

Yes, we’re talking Crossrail. The super-fast train system (total cost £15.9 billion) that, in 2018, will take you direct from Slough in Berkshire to Tottenham Court Road in 32 minutes (current journey time 52 minutes, incorporating a change on to the Bakerloo Line at Paddington).

Crossrail Route

Alternatively, if you’re travelling in the other direction, the high speed rail system will take you from Canary Wharf to Heathrow Airport in 40 rather than the current 71 minutes.

It’s the biggest construction project in Europe, connecting Maidenhead, to the west of the capital, with Shenfield and Abbey Wood in the east via some of the busiest stations in Central London, including Bond Street, Tottenham Court Road, Farringdon and Liverpool Street.

It’s a 37-station project that will bring an extra 1.5 million people within a 45-minute commute of central London. And in the process, many commentators believe that this will push-up house prices almost all the way along the line.

All of a sudden, it will take residents of Ealing, in west London, just 17 minutes to get to Farringdon, instead of 38.

Meanwhile, in the east, those living in Abbey Wood will spend just 15 minutes getting to Whitechapel, instead of 49 at present.

The Crossrail Effect

According to research by estate agents Savills, the Crossrail effect has seen house prices rise by 23 per cent above the borough average in already popular areas such as Ealing and Acton.

Far bigger growth is expected, though, near stations to the east of London as Crossrail impact on property prices. The highest increases are anticipated in less talked-about areas, including Manor Park, Ilford, Seven Kings, Goodmayes and Chadwell Heath.

Will Crossrail increase property prices? ‘Such is the nature of the London property market that any area which might directly benefit from improved transport links will rocket in price’, says James Hyman, head of residential agency at Cluttons estate agents.

‘Crossrail will bestow previously suburban areas with the equivalent of a central London address, in the sense that more of the city will become immediately accessible.’

According to property consultants CBRE, the value of houses close to Crossrail stations has increased by 20 per cent more than the local average. A further 13 per cent (£60,000) per house is expected to be added by the time the first Crossrail train runs in 2018. And this figure could rise to 20 per cent (£100,000) in central London.

‘Crossrail will increase London’s public transport capacity by 10 per cent’, explains Matthew Dabell, director of Aspire estate agents. ‘It will contribute to significantly reduced travel times for many, and will have a big impact on sustaining the economy of both London and the South East.’

Previous analysis estimates that the most pronounced rises in property value will be in Taplow, Buckinghamshire, Maidenhead, Berkshire and Burnham, Buckinghamshire. This is where journey times to London will be cut by up to 30 minutes.

Can Crossrail take the credit? It seems so. A report by property consultants GVA found that between 2008 and 2013, 41 per cent of planning applications within one kilometre of a Crossrail station cited the new rail line as a justification for the development proceeding.

Indeed, it is estimated that the improved rail link will make for some 57,000 new homes.

And it won’t just be in the Crossrail area itself that property will benefit. Values will rise in parts of western England well beyond Maidenhead.

‘The most significant changes will result from the electrifying of the train line west of Reading. This means new rolling stock and increased train speeds’, adds David Milligan, who works for housefinders Private Property Search.

‘The Swindon, Chippenham, Bath and Bristol route will see commuter train speeds increase, and journey times reduce. Places such as Chippenham, Wiltshire, and Kemble, Gloucestershire, will become the new ‘Newbury’ in terms of train times to London. This will undoubtedly have an impact on property prices.’

Not that everyone has yet caught on to this idea, because so much of the work has been taking place out of sight, in underground tunnels. ‘We are getting ever closer to the completion date, and only a few investors have seized the opportunity,’ says James Hyman at Cluttons. ‘If you follow the Crossrail map, and invest accordingly, you won’t go far wrong.’

You can view the Crossrail map here.