Real Estate Investor Magazine South Africa November 2016 | Page 56

UK INVESTMENT

The Crossrail Effect
Navigating London’s property market
BY JAMES GLEW

W

hether you are new to the London Buyto-Let market or have already built up a
London property portfolio, a key question
you need to ask yourself when evaluating a new
property is, how close is this property to a good rail
link?
You could be looking at a fantastic apartment at a
competitive price, but if it’s not close to a good station
you may struggle to get good capital gains and keep it
tenanted. Properties near to train stations are highly
sought-after and you’re bound to find a tenant willing
to pay a bit more for the convenience. This is why the
Crossrail development known as the Elizabeth Line is
so exciting.
Crossrail Limited is building a new railway for
London and the South East, running from Reading
and Heathrow in the west, through 42km of new
tunnels under London to Shenfield and Abbey Wood
in the east. The project is building 10 new stations and
upgrading 30 more, while integrating new and existing
infrastructure.
The 40 station route connects towns in Berkshire
and Essex to the City’s big employment centres as
well as Canary Wharf. Spanning more than 100km,
the new Crossrail route has surpassed the 75% mark
to completion, with the first trains expected to run
from May 2017, and the second part of the route
between Heathrow and Paddington from May 2018.
By 2019, Crossrail will be fully-operational and this is
great news for property prices and rental yields in the
vicinity of stations along this route.
Commuting times will be cut, but it’s not just the
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NOVEMBER 2016 SA Real Estate Investor

promise of faster journey times that are causing prices
to increase sharply. In areas where Crossrail stations
are being created, for instance Tottenham Court Road
and Customs House, there is accompanying urban
redevelopment. There will be new shops, offices, public
spaces and thousands of new homes. This will cause a
positive ripple effect on the residential property prices
in the surrounding area.
Royal Docks, situated close to Customs House
station, is set to benefit from a huge regeneration
project which will include floating homes, new
housing developments and hotels. There are also plans
to develop a brownfield site in the area, which could
provide over 950 new homes. Royal Docks’ prime
location, twinned with its continued regeneration and
development, mean that the sales and lettings markets
here should remain extremely buoyant.
House prices along the Elizabeth line are tipped to
increase by 3.3 per cent per year above the local house
price growth until the route launches in 2018/19.
Consequently, Buy-to-Let investment along the new
route is very strong, with both UK and foreign investors
looking to take advantage of this opportunity.
Another area that is set to benefit from the opening
of a Crossrail station and resulting reduced journey
times is Acton. Historically property in Acton sold
at a discount to its affluent neighbouring areas of
Ealing and Chiswick. Crossrail will reduce this price
difference, and ensure good capital growth relative to
the rest of London.
The Crossrail is only the first part of a major project
to connect London and the wider South East better.
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