The significance of Crossrail on property prices.
Crossrail is Europe’s largest railway infrastructure project, and it is having a transformative impact on London. Once fully open, it will serve 41 stations across the Capital, cut journey times into Central London by up to 40 minutes, increase rail capacity by 10% and add an estimated £42bn to the UK’s economy.
It has also had a significant two-part impact on the Greater London property market. The first effect is the initial bounce in prices which followed the announcement and raised house prices along the Crossrail line.
Research from CBRE shows that a 10% reduction in commuting time can increase house prices by as much as 6%. The same report shows that the impact of Crossrail appears to have been even greater than this. Since its announcement in 2008, an average 31% increase in property prices has been observed on top of existing gains in the wider market. Some reports from agents go even further and identify Crossrail areas where house prices have doubled since the plans for the new line were made public.
What does this mean from an investment point of view? The reality is that you will be paying a higher entry price when investing in Crossrail destinations than you would have a decade ago. While unfortunate, this is the price of successful infrastructure investment in the local area. However, on the other hand, it speaks to the positive impact of Crossrail, and it does not necessarily mean that you are investing too late – quite the opposite, in fact.
While some of the benefits of Crossrail have already been seen in relation to house prices, the second major impact of the new line on property prices is the ongoing aspect that will extend far into the future.
The line is scheduled to be complete and fully operational by June 2022, and its impact on house prices will continue from there as demand for properties along the route continues to grow. Returning to the CBRE report, the agency expects average additional house price growth of 3.3% annually along the Crossrail route in addition to the normal market growth.
This is a simple consequence of supply and demand. Improved connectivity and reduced commute times to Central London and other destinations such as Heathrow Airport will naturally make properties within a five- or 10-minute walk of the new Crossrail line more attractive.
However, the impact of Crossrail on house prices is not uniform across all the stations, with some areas benefitting more than others. For example, Hayes, a town in West London, has proven to be a big winner from this new infrastructure in recent years.
House prices in the town have already risen in line with this new transport infrastructure development, in the manner described above. The latest figures from Rightmove show that house prices in Hayes are 11% above their pre-pandemic peak, compared to prices in the wider local borough of Hillingdon which are just 6% above the pre-pandemic peak on average. This clearly demonstrates the benefit Crossrail has brought to the housing market in Hayes.
Indeed, Hayes has been cited by JLL as one of the major beneficiaries of the new rail line, and noted that it is now, “host to the most extensive planning pipeline in West London.”
Whereas this means that prices in the town are higher now than they would have been even five years ago, that downside is superseded by what this means for the future. Increased property prices are a consequence of the increased demand that we are seeing in Hayes for high quality rented accommodation close to Crossrail. This increased popularity makes it likely that both rents and property prices in Hayes will continue rising in the future as Crossrail becomes fully operational.
Combine that with other benefits of life in Hayes such as its tranquil suburban atmosphere, first-class employment opportunities, bustling cultural scene and its outstanding education options – among many other positives – and you have all the ingredients needed for a growing property hotspot.
The impact of Crossrail on property prices is already apparent, and the future growth potential in hubs along the route such as Hayes make this a prime investment opportunity. However, with Crossrail opening fully in June 2022, and some price rises already locked in, time is of the essence to invest, get the best possible price and make the most of the projected gains which could be coming down the track.
To find out more about investment projects in Hayes, and to learn more about the benefits on offer for investors, get in touch with our team today by clicking here.