London’s Crossrail, Europe’s largest infrastructure project, will add around 13% to house prices between now and when the first train lines become operational in 2018, it is claimed.
The project, which is well underway, will increase the capacity of the city’s transport system by 10%, will lead to the average house price rising by £60,000, according to a new report from CBRE.
The real estate firm says that the completion of Crossrail will have a twofold effect on the housing market: the rise of wider regeneration, coupled with significantly reducing commuters travel times to and from the capital every day.
The report estimates that for today’s 750,000 existing commuters, journey times into central London will be reduced by an average of 15 minutes, equivalent to 25% of the current average commute. On completion, over 200 million passengers are expected to travel using Crossrail each year, leading to the creation of central hubs such as Paddington and Farringdon, where extensive public realm programmes are already being prepared and implemented.
‘The findings from this report clearly demonstrate the inextricable link between transport connections and house prices. Since the Crossrail programme gained royal assent in 2008, house prices around affected stations have risen by 20% in excess of the London average,’ said Jennet Siebrits, head of residential research at CBRE.
‘CBRE has identified that a10% reduction in commuting time will increase a property’s value by up to 6%. For those travelling into London, travel times are forecast to reduce by an average of 15 minutes. However, from outer stations, including Maidenhead, Taplow and Burnham, the journey times into Canary Wharf will be greatly reduced by up to 40 minutes,’ she explained.
The firm reckons that the impact is most significant in those western areas such as Southall, Ealing and Hanwell which will eventually see journey times cut by between 20 and 30 minutes. In contrast, the reduction in journey times for those areas in the east is more modest with an average reduction closer to six minutes.
‘Those locations set to benefit the most are Ealing Broadway, Farringdon, Paddington, all will experience value uplift in excess of 15% over the next five years, or even as much as 27% in the case of Farringdon,’ added Siebrits.
Mark Collins, chairman at CBRE residential, said that Crossrail has already had a huge economic impact right across the region with around 10,000 people on over 40 construction sites directly employed.
‘CBRE has forecast that house prices will rise a further 13%, over and above underlying house price growth, by the time Crossrail becomes operational. This ground breaking investment has subsequently helped to encourage the much needed delivery of large scale residential development in locations benefiting from the Crossrail line,’ he explained.
‘Long term, it will help stimulate economic growth across London and the South East, through regeneration programmes at many of the stations, and through the continued improvements to capacity and connectivity across the region,’ he added.
Ian Lindsay, land and property director at Crossrail, described the project as a once in a generation opportunity to deliver transformational change and act as a catalyst for regeneration.
‘Not only are we cutting travel times and building new stations, we are developing three million square feet of commercial and residential space above our stations and improving the surrounding areas. This is addition to the millions of square feet of development happening in close proximity to the Crossrail route,’ he said.
‘Additional transport capacity is encouraging the property sector to deliver much needed new residential and commercial space for London. As CBRE’s research rightly shows, Crossrail will be a game changer for London,’ he added.