Just as central London’s housing market stabilises after strong price rises in recent years, so a new factor – Crossrail – promises to give a long-term boost to values in some overlooked areas of southern England.
Crossrail is the high-speed rail service that will begin at Maidenhead, west of London, and run 70 miles to Shenfield in the east. In between, it will stop at many of London’s wealth-generating centres, including Heathrow airport, Paddington railway station, the West End, the City and Canary Wharf.
The mammoth project has been a part of London life for some years yet is still far from completion. Land purchase for the £15.9bn scheme began in 2008 and building work started in 2010; at its construction peak in 2015, 14,000 workers will be deployed on the project simultaneously.
When it opens in 2018, Crossrail will increase London’s rail passenger capacity by 10 per cent, bringing another 1.5m people within a 45-minute commuting radius of central London and generating £42bn for the UK economy in its first 10 years of operation, according to government forecasts. Some 200m passengers are predicted to use it annually, on trains travelling at up to 100 miles per hour above ground and 60mph below. There will be 37 new stations, each with 250-metre platforms – the UK’s longest.
Travel time between London’s West End and Canary Wharf will be just 13 minutes; Heathrow airport to Canary Wharf will take 40 minutes. Yet commuters and workers who may benefit from the service are paying for it now, with disruption to many major roads: just off Oxford Street, for example, leafy 18th-century Hanover Square has become a huge drilling site.
But it is towards less well-known points along the Crossrail route that estate agents and developers are directing their gaze. One such area is Farringdon, just north of the City.
“This place has been under-explored by developers,” says Andy Martin, senior partner at estate agent Strutt & Parker. “There are many unused commercial buildings and sites that could be redeveloped. Before Crossrail there was little interest in exploiting this potential.”
Farringdon was a base for brewers, printers and watchmakers between the 18th and late 20th centuries but then declined, just as New York’s Meatpacking District had food markets, slaughterhouses and light industry until the 1960s. Martin says the 20-year transformation of the New York location – through the conversion of warehouses into loft apartments – could happen in Farringdon: “It will be just minutes from the City and West End and half an hour from Heathrow. Its old industrial buildings mean there could be Manhattan-style loft living and a proliferation of small cottage industries.”
Yolande Barnes, director of residential research at Savills, says King’s Cross and Soho may also be propelled into the limelight. These areas now have small pockets of top-end residences but could see more substantial interest from developers when Crossrail improves their transport links with the City, Barnes believes.
“They will become part of what property analysts call ‘prime central London’,” she says. “However, they will be quite different from the more traditional PCL locations. Until now prime areas have had big houses, relatively large amounts of space, parks or squares. But King’s Cross and Soho will be much more mixed, with creative industries, retail and office users.”
Property consultancy Jones Lang LaSalle says some areas have had their values suppressed because of uncertainty over Crossrail. The idea of a cross-London tunnel railway was first mooted in the 1940s, resuscitated in the 1970s and was the subject of feverish debate from 1989 until the formal go-ahead in 2010. Most of the plans suggested that Tottenham Court Road, near the West End, would be a key station, hindering significant investment in the area until certainty was established.
“Tottenham Court Road will suddenly become within easy reach of the City, Canary Wharf and Heathrow,” says Jon Neale, residential research director at Jones Lang LaSalle. “It will also benefit from the end of the ‘Crossrail Blight’ which has kept that area from realising its potential for so long. We expect similar effects in locations such as Liverpool Street and Paddington.” Neale’s firm predicts that the best homes near Tottenham Court Road will rise in value by 57 per cent by 2018 – a bigger increase than any other location on the route.
Lambert Smith Hampson, a commercial property consultancy, says that five out-of-London locations – Ealing, Reading, Heathrow, Slough and Maidenhead – will also benefit as Crossrail makes their cheaper office space a more feasible location for businesses.
Residential developers are also thinking of the project’s long-term effect. Savills has prepared a map of new homes due for completion across Greater London from 2012 to 2017, with the majority of clusters of 50 or more units relatively close to Crossrail, especially Hayes and Ealing to the west and Stratford, Royal Docks and Romford to the east. Other clusters are near proposed Underground extensions in south London.
Discussions are now afoot for an underground rail link from Chelsea to Hackney. The scheme has been dubbed Crossrail 2 and, if it happens, it may make the boundaries of prime central London extend still further.