The new High Speed Rail (HS2) link between the two cities could add an estimated £9 billion to Birmingham residential property prices, it is claimed.
Estimates from one of Britain’s leading property websites, PrimeLocation, suggest that residential property prices in the Birmingham area could leap by some £8.8 billion over next few years as a result of today’s announcement to proceed with HS2.
‘There's an inverse relationship between commuting times to central London and property prices. We estimate that every 5% reduction in journey times to the capital increases residential property close to the links outside the capital by an equivalent 5% in sale value,’ said Nigel Lewis, property analyst at PrimeLocation.
‘The 30 minute cut to journey times between Birmingham and London will add an estimated £8.8 billion to the value of Birmingham's property, before considering a host of other economic benefits,’ he added.
Nick Mead, buying consultant for the Home Counties team at The Buying Solution, believes that whilst the approval of HS2 will be deemed dreadful news for some of the residents of Buckinghamshire who will be affected, the decision to build the tunnel along part of the route has snatched victory from the jaws of defeat to some extent.
‘On a more positive note, the fact that there is now some clarity may help to unlock some of the property that has been unsellable whilst there was so much uncertainty surrounding the line,’ he added.
Indeed the announcement will make the countryside around Banbury and Bicester more popular especially for the school driven buyers who want easy access to the Chiltern Line, according to his colleague Jonathan Bramwell, partner and head of the Central region at The Buying Solution, adding that it could provide an opportunity for savvy buyers to pick up a good deal.
But many home owners along the route of the line will be faced with years of battling over compensation. More than 400 homes will have to be demolished and thousands more will be affected by increased train noise.
The government said that there are plans for an unprecedented compensation scheme for home owners whose properties are destroyed or blighted by the scheme. Owners will even have the option to sell their home to the State and rent it back on favourable terms, while those living above tunnels will be given permanent indemnity against subsidence.
Jeremy Blackburn, head of policy at the Royal Institution of Chartered Surveyors, said that the impact of HS2 on communities along the route is a critical issue and every practical step must be taken to minimise disruption and negative impacts.
‘Adequate compensation procedures must be in place for those affected by the line and RICS is willing to work with the government to advice on dispute resolution and compulsory purchase issues,’ he added.
