Taking more than a decade to put the plan in to action, London’s outer commuter belt is seeing tremendous growth.
What is Crossrail ?
Crossrail is an under-construction, high-frequency metro system running across London. It will be the largest construction project in Europe.
When finished, it will extend from Berkshire through central London to Essex, with a branch to Heathrow Airport.
The cost of building Crossrail is around £15 billion for construction plus additional spending on rolling stock and works for five stations that are being rebuilt or refurbished.
As well as offering faster travel times across London, Crossrail promises everyday benefits including reduced overcrowding on London Underground services at peak times by 40%, increased capacity on key suburban commuter routes into central London by 11%, and a reduction in journey times on the Heathrow branch of Crossrail from 45 to 30 minutes.
It is expected that around 200 million passengers will use Crossrail annually, with up to 24 trains per hour through the central section during peak periods – providing capacity for potentially 18,000 additional passengers per hour across the capital’s core.
Who built it?
Crossrail was planned by Transport for London (TfL), who have been responsible for building most of London ‘ s recent major transport infrastructure projects. They partnered with construction consortium Crossrail Ltd to plan and build the project . In 2008 they began seeking financial support from national government , as TfL does not have sufficient funds alone .
In 2009, TfL announced that they had secured £5 billion of additional funding from the UK Government to complete the project . After several rounds of negotiations it was decided that half of this commitment would come from a Public-Private Partnership , with the remainder made up through a central government grant .
Construction work on Crossrail began in 2009. Although multiple contracts have been signed for components such as tunneling and station fit outs , there is currently only one main construction contract – let by Crossrail Ltd to a Dragados/Sisk joint venture – for works between Royal Oak and Farringdon.
When finished , TfL will take over control of the entire rail infrastructure from the current Heathrow terminus at Hayes & Harlington to Abbey Wood, and will purchase new rolling stock for the route.
Why invest in Crossrail?
Crossrail will provide investors with a number of key investment opportunities. This is already evident with the average property price in the area significantly increasing and a price premium paid now on houses in surrounding areas.
First, it will offer commercial property investors exposure to prime central London locations at lower entry prices than are currently available . This is due to the large-scale regeneration works taking place over the next 10+ years as part of the project – particularly around stations at Tottenham Court Road, Bond Street , Liverpool Street , Whitechapel and Farringdon .
Second, Crossrail’s high frequency service is expected to reduce journey times across central London – for example by 40% between Paddington and Tottenham Court Road during peak hours. Reducing these commute times will free up time for workers to increase their productivity, meaning they are able to earn more. This paves the way for increased output per capita , which in turn allows companies to grow without increasing labour costs . This is expected to be an important factor behind future GDP growth, and should result in rising demand for commercial property.
Third, Crossrail aims to make London ‘ s transport infrastructure more efficient by taking thousands of commuters off existing services during peak times – reducing overcrowding on the Tube . This may prove attractive for occupiers looking for low congestion areas where staff productivity isn’t impacted by daily commutes.
As well as providing improved transport links within the capital, Crossrail will allow easy access into neighbouring commuter towns such as Reading, Maidenhead and Slough. This may help businesses to increase their labour pool, reduce staff turnover and training costs, whilst still attracting talent from further afield.
Crossrail is also expected to provide significant opportunities for investors looking for rental growth . The project is estimated by Crossrail Ltd to support 200,000 full time equivalent jobs during construction ( 2010 – 2017 ) , 180,000 of which will be located within the London area . Research has shown that commercial property locations where many people work enjoy faster rent growth than those where fewer people work .
The regeneration works that are taking place around the station sites should result in increased spending on retail. With demand generated both directly through workers at stations as well as indirectly through the increased number of visitors to retail and leisure facilities , it is likely that rents will rise significantly in these areas. This should result in great capital value growth over the long term.
Crossrail station house prices
The introduction of Crossrail has seen negative price trends reversed in several areas.
The learning legacy of Crossrail’s Land and Property activity is shown in the four topic areas below. Crossrail is the first transport project offering integrated station designs using three elements in mind: the station, above station project property and improved public spaces.
Every element complimenting another creates places and transforms spaces. Crossrail is expected to improve the local area.
Westgate house lies just 5 min from Hanger Lane and just 16 min from Ealing Broadway Station. Offering a contemporary mix of apartments and penthouses it is ideal for investors with Buy-to-Let.
The site is five minutes from the Central Lines and District Lines and 16 minutes from the City’s centre via public transportation. Crossrail is proposing to revise the building at approximately the same time as a wider development project to improve area surrounding the railway station.
It will also be combined with other projects that will improve the area around the station and improve the surrounding area of development. Price growth forecasts for 2014 – 2020 = 50 %.
JLL Price Growth Proposal (2014 -2020) = 45% Stratford is already regarded as one of London’s greatest linked centres with Underground, Overground, DLR and National Rail connections. More than £3 billion of public expenditure has been invested in the E15 and new E20 postcodes since the Olympic Games 2012.
The London Borough of Newham which includes Stratford and various sites on the future Crossrail route has been the highest performing London borough in property price growth according to the Land Registry House Price Index of 2015. Crossrail will only improve and strengthen Stratford as a well-organized and well-connected place.
Tottenham Court Road
JLL price growth forecast (2014-2021) = 42% The Government has designated Tottenham Court Road as one of four Central Crossrail – Stations with the biggest potential becoming a key asset. TCRW SOHO will be placed right at the entrance to The Crossrail station.
With Crossrail set to cut the departure time from London Paddington station to 11 minutes and to London Heathrow station to just 8 minutes Southall’s popularity is predicted to increase. With many properties available on Help to Buy, this exciting new development will be perfect for first-time buyers but also an excellent choice for Buy-to-Let investors.
The city parks show a sleek contemporary approach and the majority of them feature private balconies & rooftop areas. Travellers will be easily accessible in downtown London and a regeneration of the local area are well underway.
Crossrail Hotspots: Investing in Property
The construction plan will see a total of 40 crosses over 20 local London towns. This hugely anticipated transport proposal will connect more than 200km of the Docklands, City and West End to Heathrow Airport, Berkshire and Essex.
How will Crossrail affect UK property prices?
Crossrail is still a massive development in the UK but most certainly in the South east. The project suffered some delays, but is being delayed again by the global pandemic.
The Crossrail Effect: Residential Property Market Predictions
Crossrail hopes new high speed train will bring more than 1.4million passengers within 45 minutes of Central London. The extension of London Underground’s Jubilee Line in the late 1990s was the largest addition to London’s railway network in the past 25 years.
In 2012 GVA estimated that Crossrail could provide £5.5 billion worth of added value to residential and commercial real estate over its route between 2012 and 2021.
On average the price of houses rose by 20-20% in suburban centres such as Berkshire and Essex – and 25-30% in central London. Recent predictions indicate now that property prices along this line are likely to keep increasing by 3.3% this year.
Regeneration and long-term projections
Tottenham Court Road and Farringdon are currently enjoying strong price increases. On average we can see one winner in Crossrail (56%), White Chapel (54% of improvements), Woolwich (52% of improvements).
Identifying Opportunities: ‘Crossrail is more than a new railway link and will be the catalyst for regeneration at key locations and a strong force for London’s economic growth’ 106,000 sq. feet of premier residences retail spaces office buildings, a new theater and upgraded public spaces.
When is Crossrail due to open?
Crossrail Ltd expects the Elizabeth Line to be opened ‘as soon as it possible’ and are presenting an overall guide 2022. Social distancing measures now allow over 2,000 people to use the Crossrail site.
Crossrail will exclusively concentrate on Construction over the next few months before initiating ‘Trial Running’ in early 2021. Once the central section is open to the public the new services mainly towards the east (Reading and Heathrow) and west (Abbey Wood and Shenfield) will be introduced in incremental increments.
This change will be implemented in line with the National Rail Timetable and provide a broad variety of service across the entire London commuter belt.
Why invest in commercial property?
The majority of investors put their money into commercial property for one reason: income . The returns available from investing in prime central London commercial property are excellent, even when compared to other asset types such as equities .
For example , the FTSE 100 has shown negative real rates of return each year since 2009 ; whilst prime central office yields have remained relatively stable, with average net rental values increasing 2% per annum over the same period .
Crossrail offers an opportunity for investors who are looking for a reliable cash flow from their investment – as London rental values are only set to increase as a result of the new transport link .
How can investors benefit from Crossrail?
Exposure to Crossrail will incur certain risks which need to be understood by all potential investors. The primary risk relates to its funding, which is being provided through public-private partnerships (PPPs) , whereby the private sector invests in construction and then leases off these assets via an operating concession.
This means that whilst returns will be extremely attractive , there is no guarantee of income over the long term . For example, if passenger numbers do not meet forecasts, rent prices may fall below the level deemed sustainable by the PPP business models, resulting in them walking away from their leases .
The second risk is that Crossrail has a very limited asset base , which means there will be a lack of diversification for investors. This should result in significant volatility in the value of any investment, and could leave investors under-geared . Astute investors may want to consider spreading their funds across multiple assets – rather than putting all their eggs in one basket.
Crossrail is eagerly anticipated by property markets across the capital, with many forecasting significant growth over the coming years.
However it remains important to understand both the benefits and risks associated with investing into this relatively unproven market . It therefore pays for potential Crossrail investors to seek appropriate advice before making any commitments or investments.
Crossrail property development
Crossrail, the much anticipated railway line will run across London and it is expected to be opened in stages from 2018 under phase one to 2019 for the final stage of its opening.
£42billion has been invested into this mega construction project that will see new train lines connect Berkshire, Essex, to Hertfordshire and the Docklands in east side of London connecting Reading, Maidenhead with Heathrow Airport in west side of city; Paddington station to Abbey Wood station through Canary Wharf tube station in Docklands all in 36km or 22 miles stretch.
This is expected to ease congestion on roads currently used like the Oxford Street where there are often traffic jams.
The journey from Liverpool Street station to Canary wharf which now takes about forty five minutes will be reduced to only fifteen minutes with all stations there are eleven in total having Crossrail access.
Businesses can expect increase in footfall and potential customers as well as labour force that is currently lacking due to congestion on roads, railways and Tube stations.
Crossrail property hotspots
Where can I buy Crossrail route?
The new train line is expected to dramatically improve access to Canary wharf for people living in Abbey wood, Plumstead and Thamesmead.
The prospect of quick travel via Crossrail the journey time will be reduced to only fifteen minutes with all stations there are eleven in total having Crossrail access. Businesses can expect increase in footfall and potential customers as well as labour force that is currently lacking due to congestion on roads, railways and Tube stations.
Where can I buy property near Crossrail?
Property prices within close proximity to the station have rise quickly over recent years were they remain high demand especially after news was announced about station being built nearby. Houses less than 5 minutes walk from station are on average £734,846. Prices of houses that are more than 10 minutes walk away but less than 15 is around £552,020
7 areas that have seen Crossrail house prices grow
All these highs have seen their average house price increase significantly because they are in the immediate areas of crossrail stations
£349,674 £292,211 19.70%
As to be expected, property prices around Crossrail stations have been increasing as a result of the new infrastructure developments. In Abbey Wood, where the Mayflower Park housing development is being built over former industrial land, house prices have risen 19.70% in one year – this has also been helped by lower-than-average price points of around £300k for a 2/3 bedroom flat.
£353,194 £270,463 30.6%
Ilford has been a popular place to invest due to the quick access from central London which will be made even easier once Crossrail trains have begun running. The district is also expected to benefit from the rejuvenation of Barking town centre as a result of the project.
£363,001 £267,915 35.5%
Chadwell Heath benefits from being a relatively quick commute from central London, given the new tube service currently being built there. The Crossrail services will add to an already existing Chadwell Heath train station which is on the main line out of Liverpool Street and has fast connections across East London via the London Underground District and Hammersmith & City lines.
£369,753 £308,337 19.9%
House prices in West Drayton are around £369k compared to the average price of £536,743 for London. Many people choose to live in West Drayton due to the great transport links and proximity to Heathrow airport. This typically makes it easier to commute daily into London for work taking only 30 minutes via the express train. Cheap prices of homes in West Drayton combined with the great transport links has attracted many people to invest into property in the area.
£375,672 £319,920 17.4% Woolwich £383,278 £332,106 15.4%
Harold Wood is another Outer London area which has seen double digit growth over the past year due to Crossrail. It saw 17.4% house price increase, with an average property value of £383,278. The outer London districts are also expected to see more demand as they are typically cheaper than central London areas but still very accessible by
Hayes & Harlington
£411,750 £302,023 36.3%
Hayes & Harlington is popular with commuters to central London due to the great transport links on offer. Situated only 20 minutes away from London Paddington, it provides a quick and easy commute into the centre of London.
Areas around Hayes & Harlington are seeing large rises in house prices as people are being drawn towards them due to the quick and easy access to London.
£422,679 £285,511 48.0%
Southall is seeing some of the largest price rises in London with prices increasing by almost 50% in just one year. This has been caused by Crossrail services coming into the area. With only six trains per hour out of Hayes & Harlington, making it a relatively quiet train station on the Piccadilly line, many people are looking to invest in Southall.
£422,869 £326,989 29.3%
Like many of the previously mentioned areas, Seven Kings is seeing large house price rises due to Crossrail. Interestingly, with 10 trains per hour out of Liverpool Street travelling via Ilford and Gants Hill, Seven Kings is seeing prices rise significantly higher than nearby Woodford or Wanstead. It has become one of the most in-demand suburbs in the East London area.
£426,541 £317,386 34.4%
Goodmayes is another area which benefits from being near to central London but at a slightly cheaper price. It’s location, only 10 minutes away from Chadwell Heath, makes it popular with commuters who can travel into Liverpool Street in just 20 minutes.