The ‘Crossrail effect’ will create new property hotspots along its route which includes 10 new stations
If you know about London, you would at least have heard of Crossrail, Europe’s largest infrastructure project. Believe it or not, the idea of a West-East-West railway tunnel was first mooted in 1941 but it took until 2005 for Parliament to finally grant approval for this project. For those of you who are not familiar, Crossrail is a new rail line that will travel from Sheffield and Abbey Wood in the East to Reading and Heathrow Airport in the West. When completed, Crossrail will be a 100km route that will travel through 20km of new twin-bore rail tunnels right under the centre of our capital with 10 newly constructed stations.
Not only will Crossrail dramatically improve journey times across London, it will ease traffic congestion, increase the capital’s rail capacity by fully 10%, offer better connections across and through London. Quite simply, it will change forever the way people travel around London.
Crossrail will enter service in 2017 and will be fully operational in 2018 with 24 trains per hour operating over the central section between Paddington and Whitechapel during peak travel hours. Each train will have a capacity of 1,500 passengers and an estimated 200 million people will use Crossrail each year taking advantage of the first direct route across the capital.
It is expected that thousands of car journeys will be saved everyday as people switch en-masse from road transport. So beneficial to the economy of London is the Crossrail effect that Crossrail 2, a route from South West to North East London, is already on the drawing board and is likely to gain approval very soon.
Much has been written about the effects of Crossrail on the residential property market. To the extent that it will benefit the Greater London economy, it will certainly add to the allure of London as an investment destination. We, at RAB are more interested in the direct effects on neighbourhoods along the route and it is here that the well advised investor can really exploit the arrival of greatly enhanced connectivity and convenience.
Imagine, if you will, a sleepy suburb deep in West London. Currently it might take 40 minutes to travel to the city centre with train changes involved and up to an hour to get to the City. Crossrail will cut those journey times to 15 and 20 minutes respectively. It is very hard to overstate the transformation this is going to have on such neighbourhoods. This is exactly what will happen over the Western section from Southall to Acton, in fact these areas will enjoy the most significant reductions in journey times offered along the whole route.
There is already evidence in these neighbourhoods of the regenerative effect of these changes. Developers are snapping up potential construction sites and families are moving in and starting to refurbish the excellent housing stock in anticipation of faster journey times and the knock-on effects of residential capital appreciation.
Crossrail to drive prices
Where the Crossrail effect can be combined with ongoing rapid urban regeneration, then you will have a “double whammy” of price drivers and this is where one of our old favourites, Eastern City Fringes, rears its head once again. Already experiencing extraordinary transformation, the arrival of Crossrail at Whitechapel and Liverpool Street will catapult surrounding neighbourhoods to the top of the London growth league for the foreseeable future.
See the chart compiled by JLL for projections of property price growth around all the Crossrail stations. We are not surprised to see Whitechapel in poll position and all of the stations referred to in the Western section within the top dozen for price appreciation.
It is worth noting that this is just the “Crossrail Effect” and will be in addition to general price appreciation over the period in question. In conclusion, it is clear that Crossrail will deliver substantial economic benefits to the UK in general, and London and the South-East in particular.
The new rail project has provided a much-needed boost to the UK construction industry creating many thousands of jobs while the overall economic benefits are estimated to be in the region of £42 billion.
In our view, the direct effects on connectivity and regeneration to neighbourhoods with their own Crossrail stations will be the biggest benefits brought about by this game-changing rail network.