How to invest in Crossrail
How to gain from house price changes along the Crossrail line
Crossrail is almost ready to open. In May the first trains will begin running between Liverpool Street and Shenfield in the east. In December 2018 the first trains will run through central London, and in 2019 the full line opens to Reading and Heathrow.
It’s a huge moment for the city. The line, known as the Elizabeth line, is Europe’s biggest construction project, with a £14.8 billion budget. The 100 kilometer route takes in 40 stations, and adds 10% of capacity to the capital’s rail network.
The impact on journey times is dramatic. Naturally, this is feeding directly into house prices. Along the Eastern leg of the line values are up between 32% and 55% in the past five years, according to data collected from Zoopla by Property Partner. Forest Gate will be 12 minutes to Liverpool Street, a major reason why prices are up by more than half. The quiet village of Harold Wood in the Borough of Havering will be half an hour from the City with prices up 49% in five years.
Investment in rail is often matched by ambitious regeneration projects. Abbey Wood is getting a radical make-over. Much of brutalist housing estate of Thamesmead South, so ugly it featured in the Stanley Kubrick dystopian 1971 film A Clockwork Orange, has been either demolished or renovated. There are plans for a new library, central square, improvements to roads and pavements, and expanded commercial spaces.
The new station captures the new mood with a zinc clad Manta Ray shape upheld by vast timber arches. Abbey Wood will be served by 12 trains an hour taking 25 minutes to Liverpool Street, and hopes to use this asset to attract affluent white collar workers. Prices in Abbey Wood are up 61% in five years, though at an average of £289,000 are dramatically lower than Farringdon at £804,000 despite being only 21 minutes away.
As opening day draws closer, buy to let investors are searching for the best opportunities. Crossrail seems like the ideal way to capitalise on billions of investment reviving long neglected neighbourhoods.
Yet despite the obvious attractions, there are challenges for investors. Researching the numerous developments along the line is time consuming. Managing rental properties is never easy. And there’s the question of timing. Many investors would like to buy now whilst the market is ripe, but may have to wait until their capital is large enough to acquire a property.
There is a simpler way to invest in Crossrail areas, and regeneration areas across the country. Property Partner is an online platform designed to make investing in residential property easy and efficient. Investors browse property listings, complete with photographs and market data. Shares can be bought at a click, without dealing with mortgages or solicitors. Investors then earn proportional rental income each month, and capital gains if the property prices rise.
There are 30 properties to invest in along the Crossrail route. These include a two bed flat in Whitechapel, estimated to produce £22,800 in rental income a year. In the East there’s a three bed house in Romford within walking distance of the Crossrail station. The route splits south of the river, where you’ll find properties such as a three bed house in Thamesmead, well positioned to gain from the regeneration programme.
The platform is designed to address many of the issues with buy to let investing. A traditional buy to let transaction will incur large upfront costs, such as legal fees, along with advertising costs, service charges, repairs, and exterior maintenance. Management fees from high street agents can typically cost 18% to 20% of rental income. Property Partner tackles this with economies of scale, so is able to charge a one off 2% transaction fee on the initial investment, while management fees are just 10.5% of rental income, a figure already factored into the rental yields.
All properties on the platform are hand picked by an experienced team led by director of Property Robert Weaver, the former global director of Residential Investment at the Royal Bank of Scotland and a member of the British Property Federation’s residential committee. The team bring many decades of experience to the selection process. Increased liquidity is also on offer via Property Partner’s unique Resale market. Shares can be sold to other investors, often within days. Over the longer term, all properties have a five year cycle, at which point investors have the option of exiting their investment at a fair market value with zero fees.
Investors can be reassured by the financial stability of Property Partner, and the calibre of its management. Each investment is held in a tax efficient special purpose vehicle, ring fenced from the asset and liabilities of Property Partner and other investments. The board of directors includes Ed Wray, Betfair co-founder, and Neil Rimer, co-founder of Index Ventures, backer of numerous successful fintech companies such as Transferwise and Funding Circle. The platform is regulated by the Financial Conduct Authority (FCA) and audited by KPMG.
The Government has poured billions into Crossrail. Property Partner offers a unique way to take part in the regeneration of the most exciting parts of the capital.
- Crossrail will bring an extra 1.5 million people to within 45 minutes of central London
- From 2008 to 2013, 41% of planning applications within a kilometre of a Crossrail station cited the new railway as a justification.
- For just over three years, eight giant tunnel boring machines burrowed below the streets of London to construct 42 kilometres of new rail tunnels.
- An estimated 200 million annual passengers will use Crossrail.
- The journey time from London Heathrow to Liverpool Street will fall from 55 to 34 minutes.
- Research commissioned by Transport for London (TfL) estimates Crossrail could help create £5.5 billion in added value to residential and commercial real estate along its route between 2012 and 2021
Capital at risk
The value of your investment can go down as well as up. Forecasts are not a reliable indicator of future performance. Gross rent and dividends may be lower than estimated. Five yearly exit protection or exit on platform subject to price and demand. Financial promotion by London House Exchange Limited (8820870); authorised and regulated by the Financial Conduct Authority (No. 613499).
* Properties on our platform have, on average, after all fees and before personal taxation, delivered an estimated annualised total return of over 7%, including approximately 3% net rental income (dividends) and 4% in capital value growth. These estimated returns are calculated quarterly and (i) with reference to the average dividend yields and price movements of all previous listings, (ii) spreading over five years any purchase discount to the Royal Institution of Chartered Surveyors (RICS) valuation, and (iii) assuming the property remains tenanted. We are champions of transparency and you can download the objective data used to calculate this estimated return on the website.