As Crossrail begins its handover of stations to TFL, research by JLL looks at the ‘Crossrail effect’ and the new wave of investment into property at stations along the line.
The Crossrail Bill was introduced to Parliament in February 2005. Three and a half years later, in July 2008, the Bill completed all the Parliamentary stages and received Royal Assent to become The Crossrail Act. Works officially began on the project in 2009 with tunnelling starting in 2012. A decade on, JLL have undertaken new research to assess the impact on property values along the line.
Growth in average prices in areas surrounding 76% of Crossrail stations outperformed the regional average.
18 stations have experienced sales price growth of over 70% since 2012.
The largest premiums are typically found along the Eastern lines.
New research from JLL shows that the price of homes surrounding 76% of Crossrail stations has outperformed the wider market over the period 2012-2021.
2005 – 2009
Between 2005 and 2009, when savvy buyers were hoping to capitalise on lower prices and higher growth, the average increase of property values across all stations was 15%. At the beginning of the project, between 2005 and 2009, 20% of properties along the line saw higher house price growth than the regional average.
2012 – 2021
Between 2012 and 2021, average property values rose 73% in the areas surrounding Crossrail stations; 19 percentage points higher than the growth seen across London over the same period. 84% of stations recorded higher house price growth than the regional average. With work started fuelling confidence in those looking to invest.
Since 2012, investors have continued to support price growth in these areas. At the top of the list, properties located near Forest Gate have outperformed the regional average (London) over the period 2012-2021, with a growth of 67 percentage points higher. Properties close to Forest Gate benefit from journey time savings of 11 minutes to Canary Wharf and 16 minutes to Paddington.
Some of the largest premiums over regional averages are found along the Eastern lines. Despite this, previous JLL research has found time savings are typically the greatest from Slough and the Western section into central London. Over the past decade, house prices in Slough have increased by 25% more than the regional average.
Rising values have not been restricted to the western and eastern ends of the line though. Bond Street, Paddington, Farringdon and Tottenham Court Road have all seen their average house price more than double since works began in 2009.
After over a decade of house price surges, have house price premiums peaked, or is the best yet to come?
When large regeneration or infrastructure projects are proposed certain buyers pounce, but others want to see the improvements in place before they commit. Speculators buy in early, purchasing homes in the anticipation that investment will lead to additional growth in house prices. They are likely to have capitalised on lower property values between 2005 and 2009 when the Crossrail bill was accepted and subsequently when works began.
Certain occupiers are more likely to wait and be willing to pay a premium, once improvements are in place, or in the case of Crossrail, stations open and trains begin to run. Landlords will be the first to benefit, as improved travel times and increased capacity makes the areas more attractive to prospective tenants.
Meg Eglington, senior research analyst at JLL, says: “The promise of greater capacity and faster commutes have meant housing markets surrounding Crossrail stations have outperformed since the scheme was announced. But with trains starting to run across the network we could see further growth, now appealing to a new group of investors, homeowners, and tenants, waiting for the project to complete before moving in.”
“As Crossrail nears completion, residential areas at stations along the line have re-emerged on people’s radars, shorter commute times meaning areas previously less well connected can now compete with higher value commuter hotspots. Even with people now working more flexibly we expect a comfortable, fast, and reliable commute when they do need to travel, which will ensure that property values continue to benefit from the Crossrail ‘effect’ for years to come”.