Crossrail Update: How Will Crossrail Affect UK Property Prices?
As one of the largest developments in the UK – and certainly in the South East – Crossrail remains something investors should have their eye on. While the project has been hit with a number of delays, the latest being due to the global pandemic, for the property market the question remains: how will Crossrail affect UK property prices?
Crossrail update: When is Crossrail due to open?
Crossrail Ltd expect that the Elizabeth Line will open ‘as soon as it is practically possible’ and have given a guideline of 2022.
While the new rail line is in the final stages of delivery, progress has been slowed by the potential risks that a second outbreak of COVID poses.
Social distancing measures means that a maximum of 2,000 people are now allowed on Crossrail sites, nearly 50% of the manpower that could attend sites pre-pandemic.
With this in mind, Crossrail plans to focus entirely on construction over the next few months, before starting ‘Trial Running’ in early 2021.
Trial Running is a complex process of tests that ensures all of the safety, security and navigational measures are working correctly before opening for passengers.
The final stages of Trial Running also include Trial Operations, which involves inviting passengers onboard to simulate ‘real-time scenarios and ensure the readiness of the railway itself.’
Crossrail then believes that once the central section opens for public use, full services to the east (Reading and Heathrow) and west (Abbey Wood and Shenfield) will be introduced incrementally. These changes will be implemented in line with the National Rail timetable and ensure a full range of service across the entire London commuter belt.
How will Crossrail affect UK property prices?
As we move closer to the final delivery stages of Crossrail, this means that UK property prices will begin to react accordingly.
Early studies commissioned by Crossrail Ltd in 2012 suggested that by 2021, house prices would rise by an extra 25% if they were located near stations.
In reality, we’ve seen many locations vastly exceed this prediction. The ‘Crossrail Effect’ has almost certainly had an effect on locations such as Slough, Woolwich and Uxbridge, with property prices near any of the 40 stations rising by 66% between 2010 and 2017 according to Hamptons International.
This could be down to several factors. Firstly, while the Elizabeth Line is an upgrade for the entire commuter belt, the ‘Crossrail Effect’ is having the largest impact in two distinct locations: the most popular commuter areas and the towns where reaching London is generally more arduous.
It’s the stations seeing the largest improvements or the towns having their journey times reduced the most that are typically seeing the biggest rises.
Secondly, supply and demand remain huge factors. Many locations along the line already had plenty of stock to meet demand, yet towns such as Slough, Woolwich and Bracknell are rapidly rising in demand while still facing residential undersupply.
This alone is having a major impact on property prices in those areas, driving growth even before we take the Crossrail effect into account.
Nationwide data suggests that property 500m from a rail station – regardless of the line – can expect to deliver a 9.4% premium. Crossrail is taking this to another level and past performance shows this.
While the challenges posed by Brexit and COVID-19 have clearly had a short-term impact on prices, it’s expected that the mini boom we’re experiencing may continue as long as demand is there.
It’s not a stretch to consider that the advent of Crossrail will reignite this demand across the South East. Completion of the line may even contribute to a localised boost of prices as investors finally ‘pull the trigger’ on investments they’ve had their eye on.
This makes towns such as Slough, Woolwich and Uxbridge such key areas. While they remain affordable compared to the capital, they’re all towns that will be prime targets for commuting tenants and buyers once the line completes.
Our own research reinforces this – out of 120 investors, over half (52%) see transport links as a key factor in their decision to invest, highlighting the competitive nature locales such as Slough could hold in the future.