Crossrail – a game changer in every aspect
There have been numerous rumours and discussions regarding Crossrail since it got the green light back in 2008. This exciting rail investment is Europe’s largest infrastructure project, and is likely to have a massive impact on London both socially and economically.
The highlights of this project is that it will reduce travel time by up to 30-40 minutes and it will increase the capacity of London’s transport network by 10%, which we believe at Engel & Völkers will have a huge effect on property prices in the capital.
At the moment, 10 brand new stations are being built as part of this development scheme, and by 2019 Crossrail will be fully operating and connecting 40 stations – from Reading and Heathrow all the way east to Shenfield and Abbey Wood. By the time of completion, approximately 1,5m people will be within a 45-minute accessible commute to London.
Impact on different aspects of London life
Without any doubt, Crossrail will be bringing a full set of social and economic benefits. It will fully transform the whole London transport network, bringing good news especially for long distance travellers as their commute time will be drastically reduced. It will not only increase accessibility to and from London’s outskirts, but it will also create a strategic connection between major industries and retail areas.
This will inevitably create an economic surge, will unlock further development strategies and will surely increase the financial and real estate values. We also believe we will see a major improvement in terms of easing congestion and offering better transport connections and travel conditions for commuters.
Being such a massive development scheme, it has also given the employment market a solid boost, most noticeably in the construction area. It will create numerous employment opportunities with an estimated 55,000 new jobs coming up on the market in the next few years.
The approximate cost of this project is £14,8 billion, however there is an estimated benefit of £42 billion that Crossrail will bring to the economy, and this will be seen most prominently in real estate, industrial, retail and job market sectors.
The impact on London’s property market
In real estate terms, it will have an immense impact, as we believe it will act as a catalyst for increasing property value. Since the project got the green light in 2008, the prices of properties around the affected stations have increased by almost 20% and a further growth of 10% is being estimated by the time Crossrail will be fully operational. If we look at the figures, this means circa£14,7 billion as a total increase in residential property values around the 40 stations, which is going to have a colossal effect on London’s property market.The last few decades have shown what an important factor is transport in London’s real estate market, especially when we consider that approximately 90% of people would like to live within less than a mile radius from a main transport link.
The last 18 months have shown a price “ripple” effect, most noticeably in the areas surrounding London and the stations affected by the construction of Crossrail. This effect will help feed into stronger price growth going forward, particularly in areas which until now were underperforming in terms of sales and lettings. This effect is also generated by a new project which has estimated that Crossrail will help deliver the construction of approximately 57,000 new homes.
Although this is great news for home owners, however is extremely worrying for first time buyers looking to purchase in the next few years, especially with the latest rise in stamp duty tax, which the Government brought into effect at the end of 2014. The increase in stamp duty has until now left behind a reserved property market which is still reacting to these tax implications.
At the moment, Crossrail is being considered as the most ambitious transport construction project undertaken in a generation.
The team at Engel & Völkers Chelsea strongly believes it will have a major effect in the long term on values of development investments and real estate acquisitions. It will also create thousands of new jobs and it will give London a substantial economic boost, making sure that we keep up with an incredibly fast growing globalised marketplace.
If you have any questions we would welcome the chance to answer them, so please do get in touch with our office.
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