A recent report prepared by GVA Grimley on the impact of Crossrail on property suggested that it could increase property values by £5.5 billion, so as Phyllis and Ada, Crossrail’s first two tunnel-boring machines, begin work to create the supersize tunnels that will run for 21km under London from east to west and enable passengers to travel from Canary Wharf to Slough or vice versa in just 44 minutes, we thought we would take a closer look at what Crossrail will do for property in London. To date, most of our experiences of Crossrail have been limited to due diligence searches (to make sure land will not be compulsorily purchased), and watching on as large holes appear at various points along the route, Tottenham Court Road instantly springing to mind. However now it is only five years away from delivery what can we expect from the £16 billion project, who will benefit, and what opportunities does it present?
Benefit for transport
Firstly there is the obvious benefit for transport in the City; as well as creating the ability to travel quickly from east to west, the new railway will take some of the load off the increasingly over crowded tube network and is also predicted to reduce road traffic. It will create a quicker link into London from Heathrow and bring an additional 1.5 million people within a 45 minute commute into London’s key business districts. Making London move better will clearly have an impact on productivity, and help to maintain London’s position as a key global city.
Catalyst for regeneration
It is also hoped that the infrastructure project will act as a catalyst for regeneration. It is thought that Crossrail will support the delivery of 57,000 new homes and 3.25 million square metres of commercial space with significant property investment taking place at locations including Canary Wharf, Farringdon and Whitechapel, all of which have been identified as amongst the areas likely to change most as a result of Crossrail.
Eight new stations are to be built as part of the project, with significant above station development creating new office, retail and recreation locations across London. With many other stations undergoing significant upgrade works as part of the project it is recognised that Crossrail’s ability to support development and increases in property values hinges on the quality of the public space immediately around each station. It is hoped that careful planning of these spaces will help to drive the regeneration sought.
Increase in property values
The precise distribution of the benefits from Crossrail (estimated to total £42 billion) remains to be seen but all London Boroughs along the route are predicted to see uplift in property prices due to Crossrail. As you would predict, the already strong central London locations will not be transformed by the coming of Crossrail. It will however, reinforce the strength of these existing areas and help generate occupier demand which will benefit those who hold assets in the vicinity of the stations. With large parts of the West End, City and Holborn estimated to be within a 15-minute walk of Crossrail, the impact is likely to be far reaching. Commentators have predicted that central London will remain the location of choice with businesses unlikely to relocate to the more suburban locations along the route.
Outside of central London it is predicted that the main impact on property will be in the residential market, with residential capital values in the suburban areas surrounding Crossrail stations likely to increase by 20 per cent between 2012 and 2021. Again though, it appears that the impact may be greater in the central areas with residential property values over the same period for properties surrounding Crossrail stations in central London predicted to increase by 25%.
Benefits becoming clearer
Although Crossrail still presents opportunities and we can expect continued and increasing speculation over the coming years on which areas are likely to benefit most, it is thought that much of the available property investment opportunities along the route have already been snapped up and that the attention of those with cash to invest will soon turn to the longer term projects of HS2 and Crossrail 2. For the vast majority of us, Crossrail remains a distant promise but as it draws nearer the benefits it will bring begin to come into focus and we can all start to envisage it a little more clearly.