Property Investment on the Crossrail

Can property Investment on Crossrail still prove profitable or have the best bargains already gone?

What is Crossrail?

From 2018 there will be a new 75 mile high-speed Crossrail route between Reading and Shenfield which will take in 40 stations (10 new ones) and provide the first ever direct connection between all of London’s main employment centres and Heathrow airport.

Up to 24 trains an hour will run during peak periods slashing journey times into the capital and changing the lives of millions of Londoners and suburban commuters.

Over 1.5 million more people will be placed within a 45-minute commute of the key business districts.

Crossrail Stations

Crossrail stations split into three main groups:-

West

Reading, Twyford, Maidenhead, Taplow, Burnham, Slough, Langley, Iver, West Drayton, Hayes and Harlington, Southall, Hanwell, West Ealing, Ealing Broadway, Acton (Main Line)

Central

Paddington, Bond Street, Tottenham Court Road, Farringdon. Liverpool Street, Whitechapel

East

Southern branch –

Canary Wharf, Custom House, Woolwich, Abbey Wood

Northern branch –

Stratford, Maryland, Forest Gate, Manor Park, Ilford, Seven Kings, Goodmayers, Chadwell Hill, Romford, Gidea Park, Harold Wood, Brentwood and Shenfield

(To see the route in more detail, please click here.)

Impact on prices

As nothing boosts the value of homes more than a major transport upgrade, Crossrail has been, and is continuing to be, a catalyst for regeneration.

Being aware of the impact that the Overground improvements had to property prices in areas such as Forest Hill, Sydenham and Peckham canny investors have already locked onto the potential financial advantages of investing in properties on the Crossrail link even though it is still three to four years off completion.

Early investors can expect to benefit over the longer term in the same way that purchasers of properties did in Stratford after the Olympic Games were awarded to London in 2005.

New building projects in and around the new central London stations and interchanges — Paddington, Bond Street, Tottenham Court Road, Farringdon, Liverpool Street, Whitechapel and Canary Wharf meant that 10% of homes bought last year were within a mile of a Crossrail station.

Since approval was given in 2008 the value of homes around the stations along the Crossrail route has grown by 20% more than underlying capital appreciation in London and the South-East.

Hotspots

Hotspots have already emerged and others will follow, some examples are as follows –

West

Reading, Maidenhead, Taplow, Slough, Iver, Burnham and Langley on the western section of the route will gain enormously because the journey time to central London and the financial centres around Canary Wharf will be significantly cut by up to 40 minutes.

In Maidenhead for example the town centre is getting a facelift and local house values are at record levels and rising.

Meanwhile the districts from West Drayton to Acton have seen the highest house price growth of any part of the Crossrail route.

A “garden village” is planned in West Drayton, with 775 homes, green spaces, shops and an upgraded pedestrian route to the Crossrail station.

The new station at Hayes and Harlington will have a spur to Heathrow which puts this area firmly in the spotlight.

Southall is getting one of the capital’s biggest new neighbourhoods. At least 3,750 homes will be built on an 85-acre former gas works bordering Grand Union Canal.

Because Ealing Broadway will be directly connected to the West End, City and Canary Wharf employment centres it is tipped to become a better investment than nearby Chiswick.

Acton is becoming popular with young renters and buyers who can’t afford Hammersmith or Shepherd’s Bush, but want to be well connected.

Central

Farringdon station in Clerkenwell which will be the only London terminus with integrated north-south (of the river) and east-west routes) is poised for huge growth with a projected sevenfold increase in commuters.  Not only will it allow passengers to board Crossrail, Thameslink and London Underground trains but will also provide direct links to Gatwick, Heathrow, Luton and London City airports as well as to Eurostar services at St Pancras and Brighton on the south coast.

Paddington’s new Crossrail station will create a 17-minute commute to Canary Wharf – at a price! –  two-bedroom flats are from around £800,000, and houses from about £2.5 million

East

Poplar will now be linked direct to Canary Wharf Crossrail station and although prices are 15-20% higher than a year ago they still offer an attractive financial alternative to the significantly higher prices in central London.

Royal Docks one of London’s main regeneration and housing growth areas will get a huge boost from Crossrail which will connect with Tottenham Court Road in only 15 minutes.

Abbey Wood on the Crossrail southern spur into Greenwich which is currently a desolate, isolated and relatively cheap south London outpost has the potential to become a serious commuter zone.

Woolwich remains one of the cheapest places to live in London but when the station opens in 2018, no other place beyond Zone 1 in south London will be as well-connected.  Ex-local authority flats in Woolwich start at less than £125,000 (see below).

Stratford will be reclassified next year as Zone 2 whilst Maryland which merges into Leytonstone offers local property prices around 30-35% below the London average.

Forest Gate, Manor Park and Ilford will all come within approximately 20 to 25 minutes journey time of Tottenham Court Road and under an hour to Heathrow.

Seven Kings, Goodmayes and Chadwell Heath house some of the capital’s cheapest homes whilst at the other end of the scale Gidea Park is an original Edwardian garden suburb, with small cottages and houses in an attractive setting adjoining golf courses and woodland.

Brentwood has a wealthy, rural feel with a traditional high street, old fashioned independent shops and a monthly farmers’ market but will be less than 30 minutes from the City by Crossrail.

Shinfield right at the end of the Crossrail line, is leafy, prosperous and great for families

Follow the Developer

Crossrail is owned by Transport for London but is partly funded by developers who will inevitably want to cash in on their investment.

For example Berkeley Homes has contributed £30 million towards the £100 million Crossrail station at Royal Arsenal Riverside in Woolwich and are developing 394 flats in five towers above the Crossrail station. Local residents will be able to get to Canary Wharf in eight minutes, the City in 15 minutes and Heathrow in 47 minutes (and the local council is lobbying Transport for London to change Woolwich from a Zone 4 to a Zone 3 station).

Canary Wharf is expected to be another Crossrail winner. Not only will it will have a direct link to Heathrow but the new station will be one of the largest on the route, with shops on six floors plus restaurants and cafés and a landscaped park. Also around there are around 10,000 new homes in Docklands in the pipeline.

Has the Value already gone?

Developers have and will continue to factor in future price growth when selling homes both off-plan and ready for occupation.

Although In some areas the best bargains may have already gone the burgeoning new developments and ongoing re-generation projects are continuing to open up new opportunities.

There are predictions that prices in and around Crossrail stations could increase by a further 13% over and above wider growth by 2018 (in central London, the overall increase will be closer to 20 per cent), typically adding £100,000 to the value of each property.

If these predictions are realised then property Investment on Crossrail will still prove profitable but the window of opportunity for the best returns may be closing fast.

About Source Property Investment

Source Property Investment provides independent advice to property investors looking to maximise their financial returns from buy to let investment.  Please call us on 0845 3881 369 for further information.