Crossrail 2, a high speed railway scheme connecting north and south London is the next stop in the journey to make the capital more accessible to more people with shorter journey times.
Despite protestations from some residents in places such as Chelsea and Wimbledon, who oppose the level of disruption which accompanies major infrastructure work, it’s gathering political support. Mayor of London Boris Johnson and MP Zac Goldsmith have claimed that the £27 billion project will result in 200,000 new homes and create 200,000 new jobs.
But when will the transport programme, which has not yet been given the green light, start to drive up house prices along the proposed line, and where will the smart money buy?
Use our interactive graphic to find out house prices in the 750m around a proposed Crossrail 2 station, and how much values have moved there already, due to momentum in the London market and Crossrail chatter. Data supplied by Knight Frank / Land Registry.
Learning from the Lizard
Although still two to three years away from completion, its predecessor, Crossrail (1) – now called the Elizabeth Line and informally dubbed the Lizard – is already estimated to have added £5.5 billion to property values along its route.
“House prices within 750m of stations on the Elizabeth Line have outperformed the wider Local Authority markets by an average of five per cent since the line was granted Royal Assent in the summer of 2008, despite the fact it will not open fully for another two to three years,” says Grainne Gilmore, head of residential research at Knight Frank. “Some stations have outperformed by as much as 40 per cent and values have been boosted not only by the improvement in connectivity which will be provided by the line, but also in many cases regeneration.”
Crossrail 2: Stage 1
These are all positive signs for homeowners who live along the proposed Crossrail 2 route, which is expected to connect the National Rail networks in Surrey and Hertfordshire via new tunnels and stations between Wimbledon, Tottenham Hale and New Southgate. It will link up to the London Underground, Overground and Crossrail 1.
Speculators of the sequel are already getting in on the action – or at least buying into the noise and momentum that occurs before a financial and political commitment is made.
“Big infrastructure requires cross party support. Ultimately central governments spanning more than one political lifetime must reaffirm earlier commitments made,” says Adam Challis, head of residential research at JLL. “But relevant areas will get an early uplift from speculators well before that 100 per cent guarantee is given. Activity is already happening.”
Challis is referring to those purchasing land, that they will then sit on until the time is right to offer it to housebuilders and developers at a profit.
Buy-to-let investors are also banking on massive capital appreciation over the next few years, as the sound of lobbying reaches a crescendo. “We are smack in the middle of phase one,” says Challis. “These deals are being done off the back of notional investment. Even if Crossrail 2 doesn’t come off, there is value in the land anyway.”
Crossrail 2: Stage 2 & 3
Stage two is when physical construction begins, when the big boring machines start tunneling into the earth below London. This will trigger another wave of buyer activity of both land and existing property.
Stage three is for the conservative investor and home buyer. They will wait until the project nears completion (2033 in this case) before moving in to take advantage of the final upsurge in land values and house prices.
House price acceleration
New research, exclusively for The Daily Telegraph, shows that house prices along the route of Crossrail 2 are already being influenced.
Data from the estate agents Knight Frank reveals that prices in Seven Sisters – on Crossrail 2 – in the borough of Haringey, have seen the biggest percentage uplift over the last two years from £221,000 to £373,000.
Unsurprisngly, given its gentrification story, values in trendy Dalston have also leapt considerably since 2012, from £380,496 to £590,107.
“The properties around the station will see a correlation with the wider market, but will also move ahead of the wider market,” says Challis. “This is based, at this point, on what we call hope value.”
The average house price in Hertfordshire’s Broxbourne, the most northerly point of the line, has jumped from £296,000 in 2012 to £369,000 in 2015. The increase at the other end of the line, Shepperton, is less dramatic. The average sale prices has climbed from £300,000 in November 2012 to £347,000 in November 2015, suggesting there is still some way to go and possibly some bargains to be had.
“When Crossrail 2 eventually gets going, its impact will be huge,” says Johnny Morris, head of research at Countrywide. “It goes through areas that aren’t currently well connected and in Zone 3, particularly, established but hard-to-get-to places like Tooting Broadway and Wimbledon will see a good jump in house prices. But the reality is that all of the areas with Crossrail 2 stations will benefit.”
Priced out
There are sections of the line which are already deemed unaffordable based on the average salary of Londoners. Properties within a 750m radius of Tottenham Court Road, Victoria and the King’s Road in Chelsea, three station locations, are all priced well above £1 million, at £1.1m, £1.4m and £1.4m respectively.
The areas through which Crossrail 2 will run, and in which homes are still below the £300,000 mark, include Cheshunt, Waltham Cross, Enfield Lock, Brimsdown, Ponders Edge and Angel Row.
These stops are all bunched together at the north of the route. “As Crossrail 1 has progressed we have seen some locations benefit disproportionally to others,” says Challis. “Those areas in desperate need of regeneration such as Abbey Wood in south-east London saw much steeper price growth than, say, Paddington or Stratford which had already been through a transformation journey.
“But the gentrification which goes hand-in-hand with such infrastructure projects, almost by definition, will displace some elements of the population,” he adds.
While house price growth along the track is seen as a good thing for investors who pile in early or existing homeowners, not everyone can afford and benefit from such progress. In addition, there are those will not directly use Crossrail but live near and will be affected by the dust and noise from such a big constrution process. Their local population will grow and there may be more strain on services.
“But there will be more Crossrail 2 winners than losers,” Challis says