Property prices near London Crossrail stations set to outperform local markets
On average property prices within a 10 or 15 minute walk from the new Crossrail stations in and around London have already outperformed prices in the wider area by some 5%, new research shows.
While there are pockets of sustained outperformance, especially in central London, average residential property prices around a few of the stations in the Eastern and Western sections of the line show a more mixed picture.
Yet those areas where price growth has lagged the surrounding areas may offer significant opportunities for further price uplifts, especially where large scale regeneration and development is underway, according to the major analysis report from real estate firm Knight Frank.
It points out that when fully complete in 2019, Crossrail will bring an additional 1.5 million people to within a 45 minute commute of the centre of London. ‘In many cases, it is not just the reduced travel times that have the potential to create value, but also large regeneration projects connected with Crossrail, which are not only improving the realms around stations, but providing a wider choice of higher level amenities as well as residential property options,’ said Grainne Gilmore, Knight Frank head of UK residential research.
The firm has previously assessed how residential prices around central Crossrail stations performed between 2008, when Royal Assent for the project was granted, and 2012 and found that on average, prices within a 10 minute walk of the stations outperformed the wider prime central London market by 8%.
Now it has taken its analysis further and also looked at how property prices around each of the stations from Shenfield to Maidenhead have moved over the last seven years, and comparing this with average price growth in the surrounding areas.
In total, there are 2,976 residential units in schemes which have been started within a 10 minute walk of central Crossrail stations and a further 10,096 units with planning approved. ‘Some of these schemes may be phased, and take some years to deliver but the development potential of the areas surrounding the stations is clear,’ said Gilmore.
‘The research shows that prices around Canary Wharf Station have lagged the strong growth seen in prime outer London from 2008 to date, but the scale of development taking place in the area, and further East, make this an area to watch,’ she pointed out.
Residential property prices within a 10 minute walk of the central stations have risen, on average, by 57% since 2008 compared to 43% growth in the prime central London market over the same period, according to Knight Frank’s own index.
The biggest rises in residential prices have been seen within a 10 minute walk of Bond
Street with an 82% uplift in prices in the area surrounding the station, which encompasses much of Mayfair. ‘While some of this increase has been underpinned by the buoyant central London market, it does not explain the full uplift. Prices in the wider Mayfair market were some 30% higher at the end of the third quarter of 2014 than July 2008,’ Gilmore said.
The research also shows that residential prices within a 10 minute walk of Tottenham Court Road Station, an area which stretches from Holborn and Bloomsbury to Oxford Street and Fitzrovia, have also seen growth of 61% since July 2008, with a particular rise in prices between the second quarter of 2013 and the second quarter of 2014.
On average, residential properties within a 15 minute walk of stations in the Eastern section of Crossrail have outperformed prices in the surrounding local authorities. The combined Eastern Index shows a 21% uplift in prices since July 2008, compared to an 18% rise in the local authorities where the stations are situated.
The biggest uplifts in prices have been seen around Maryland and Forest Gate stations, with a 37% and 35% rise in prices since July 2008 respectively. In comparison, prices in the wider local authority of Newham rose by 16% over the same period.
‘These areas have seen a sharp rise in buyer demand in recent years with many seeking out good quality housing stock at a lower price per square foot than comparable areas in West London. The addition of Crossrail to the overland train services currently in operation will likely enhance its appeal to buyers from 2019,’ Gilmore explained.
Shenfield, a popular residential area in Essex, has also outperformed the wider local market by 12% over the time period. However, prices surrounding several stations along the Eastern route of Crossrail have not quite kept up with the surrounding area.
Average residential prices within a 15 minute walk of Goodmayes, Chadwell Heath and
Abbey Wood stations have shown growth over the period, but have lagged the wider local authority averages. An underperformance around Ilford station is more noticeable, with prices lagging the local authority by around 10%.
The analysis shows that average residential prices have risen by 25% around Woolwich station, a slight underperformance compared to the 32% uplift in Greenwich over the same period. The report says this trend is likely to change as the extensive new development around the station is completed.
Residential property prices within a 15 minute walk of stations on the Western Crossrail line have, on average, outperformed the wider market by 6%. Between July 2008 and the end of
The third quarter of 2014 prices rose by an average of 28% around the stations compared to a 22% rise in the wider local authorities.
However, this average masks some large differences in performance. Prices around the station at Acton have climbed by 77% over the last six years, far above the 44% growth seen in Ealing over the same time period.
At the other extreme, prices around Southall Station underperformed the local authority average by around 30% between the third quarter of 2008 and the third quarter of 2014. Prices within a 15 minute walk of the station rose by 12% over the time frame, but this was some way below the 44% growth seen in the wider Ealing area, much of which came in 2013 and 2014. The report suggests that lagging price growth around Southall Station presents an opportunity.
The report concludes that it is notable that over the last six months, price growth in prime central London has eased, yet prices around many stations have continued to climb and over the last 12 months, the price ripple effect in London has really started to take effect, with stronger price growth in areas surrounding central London.
‘This could help feed into stronger price growth around stations towards the East and West, especially those which have underperformed to date, and where housing supply is set to be delivered in the coming years,’ said Gilmore.
‘We expect that residential prices in and around most Crossrail stations will outperform local markets between now and 2018, with some areas performing more strongly. Our base forecasts show cumulative price growth of 15.2% in prime central London between now and the end of 2018, with growth of around 18% across London as a whole,’ she added.