London’s Crossrail line, which is currently under construction, could be a significant asset for the city’s property owners and real estate developers.
The new Crossrail system is scheduled to open to the public in December of 2018, with the first line in the new system — the £14.5 billion Elizabeth line — marked in a regal purple in transport maps of London.
In addition to reducing traffic in key parts of the city and easing transportation around London, the new Crossrail system could be a significant boon for owners of homes and commercial real estate in the areas served by the system.
Luxury real estate firm Mansion Global believes that the new line could provide a much-needed boost to London’s somewhat stagnant real estate market, which has experienced slow growth in the last year after almost a decade of continual appreciation.
The potential effects of the line on real estate prices in the capital are supported by a variety of studies into its effects. A 2012 study commissioned by Crossrail noted that areas served by the line — in particular, residential real estate close to its stations — were expected to see a surge in prices as much as 25% higher than the average rate of appreciation across the city.
Other data seems to back up this assumption. Using housing data from previous years, Lloyds Bank calculated that residential real estate located close to Crossrail stations has increased in value (based on price at sale) by 39% from 2014 to 2017.
The average increase for surrounding areas? A more modest but still extremely impressive 23 per cent.
The new line is aimed at providing faster services to areas of London that aren’t well served by existing public transportation. A 2015 briefing paper on the project states that it will provide fast, service that allows more than 1.5 million new people to reach central London in 45 minutes.
It’s also a major boon for areas of London that many real estate developers and investors have shied away from due to a lack of interest. In Woolwich, West Ealing and Whitechapel, property prices have doubled since 2007 as the project has developed from concept into reality.
In addition to serving as a boon for property owners in the areas served by Crossrail, real estate industry analysts believe that the project could play an important role in continued growth of the capital’s real estate market.
Home prices have slumped in London in the last few months, with Savills predicting in late 2017 that London home prices could potentially fall by as much as 2% in 2018 before holding steady over the following year.
Despite this, the upmarket property agency still holds a positive view of London real estate over the near term, believing that property values in London will rise approximately 7.1% from 2018 to 2022.
This is a sharp departure from the incredible 56% growth rate in home prices that the capital has experienced since 2012.
Despite this, with Crossrail soon to open and new areas of London soon to be opened up to an additional form of public transportation, the future is looking bright for property owners in areas served by the upcoming Elizabeth line.