The Crossrail 2 route was announced in early 2013, but could delay to the building of the line impact those who have already invested?
The “Crossrail effect” on property near the new Elizabeth Line has produced huge gains for homeowners and investors in the decade since the project was announced.
Prices around all 40 stations on the new 60-mile railway from Reading and Heathrow to Essex, which opens in December next year, have risen by more than 41pc in 10 years, according to the analysis by the crowdfunding platform Property Partner.
But news that the £31bn Crossrail 2 line, which would cut through prime Surrey commuter belt and central London to Hertfordshire, may be delayed by up to a decade because of a funding shortfall could impact those who have invested in these areas in anticipation of rising rents and imminent growth.
Since the Crossrail 2 route was announced in early 2013, tenant demand has spiked in the areas along the proposed line, pushing up rents in 13 of the 15 local authorities. The biggest rises have been in the northern and north-western stretches, notably Broxbourne, the northern terminus, where rents have increased by 21.5pc (according to the latest Rental Index by the property investment platform Landbay).
Before the 2013 announcement, rents were falling in seven of the authorities. And the recent admission that the project is likely to be delayed until the 2040s has coincided with rents falling again – including by 1.75pc in Broxbourne – as tenant demand dwindles.
John Goodall, chief executive of Landbay, says: “Planned infrastructure is a key driver of tenant demand, so rents and property prices along the planned line quickly followed suit. But news that the line may now be delayed by a decade is nothing short of a hammer blow to all those that have had the foresight to plan that far ahead.
“What’s needed by tenants, landlords, buyers, business and builders is a clear commitment from the Government that the project will be delivered in 2033 as expected – not only to help people and businesses plan their lives, but also to allow adequate time for local authorities to plug housing shortfalls before demand spirals out of control.”
In a political and economic climate where so much already feels in difficulty, some observers think the announced delays to Crossrail 2 send a further negative message about London’s future potential. Charles Holland, head of new homes at Marsh & Parsons estate agents, says: “Major infrastructure upgrades like Crossrail 2 improve the connectivity of areas ripe for regeneration that otherwise do not fulfill their potential.
“One of the major benefits of this will be vastly improved levels and quality of housing stock, including affordable housing. It is important for London and the UK to send a message that we are open for business and an attractive place to live and work, and that key infrastructure investments will be sanctioned as we look forward.”
But Chris Lloyd, associate director at the independent mortgage brokerage Enness, believes the changes to the timetable may be an opportunity for investors. He says: “The delay will, I’m sure, slow price growth along the route, so it’s worth buyers and investors considering these locations as they will probably start to creep up again as the end date gets closer.”
Rob Bence, co-founder of The Property Hub, is similarly optimistic. He says: “The opportunities for landlords are huge, regardless of the delay.
“When it comes to property prices and major infrastructure, there are usually two spikes – one after the initial announcement and one on completion. The first is led by investors. Landlords who own properties along the Crossrail 2 route will reap the benefits long before the line is finished.”
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