The development extends the existing Docklands Light Railway, links the East London Line with Highbury and Islington station in north London and with West Croydon, south of the river. It will link the commuter towns of Maidenhead to the west with Shenfield and Abbeywood in the east.
As part of the ambitious project, due for completion 2017, there will be a new tunnel under the West End and the City of London. Journey times from central London to Heathrow airport will be halved.
Several other rail projects are also set to boost property prices. By June 2010, the East London Line will run from Dalston Junction, in the North, to New Cross, Crystal Palace and West Croydon in the south east.
By 2011, the long-awaited extension between Dalston Junction and Highbury & Islington will be complete. Prices in Dalston, a more inaccessible and less gentrified part of Hackney, have already risen in anticipation. A one-bedroom flat at The Interchange scheme cost £210,000 off-plan in 2006, but these small flats are now being sold for £250,000.
The extension of the City Airport branch of the DLR to Woolwich Arsenal is due to open early next year, cutting journey times into Canary Wharf and the new Ebbsfleet International station, on the high-speed Eurostar link, is expected to be a major catalyst for regeneration in north Kent.
According to Knight Frank, the biggest winners will be locations where large infrastructure projects converge, or where transport links are limited at present. These include West Drayton, Hayes, Southall and Hanwell, all close to Heathrow, the Crossrail link, universities and business parks.
Although Stratford is already in demand because of Eurostar and the Olympics, it will continue to benefit when Cross rail is complete. Property prices in some of the shinier new-build schemes are already high. A two-bedroom flat on the 16th floor of the One Stratford development at the centre of the Olympic village costs £389,950.
But prices in the area overall have been deprived of the "Olympic effect". The average property has risen by 17per cent since 2005 – the same as the national average, according to Land Registry figures.
