How Transport Can Affect Property Markets
It is a truth universally acknowledged that good transport links have a positive effect on local house prices. The general rule of thumb that the closer a property is to a train station (or tram stop, in some cities), the higher the price it will fetch. For example, according to analysis by Nationwide building society:
- Homes in proximity to Glasgow rail station are worth an extra £9,400
- Homes close to a Metrolink stop in Manchester are worth an extra £12,000
- Homes with a tube station nearby in London are worth an extra £42,000
And equally, problematic local transport can impact prices negatively. You only have to look at the drop in property prices and rents along the Southern Rail train routes (following months of frustration for commuters due to the ongoing disruption on their network) to see that.
Being close to an airport can also have pros and cons in relation to local property markets. Proximity can be seen as a positive thing for those who travel often, but overall being close to a flight path is seen as less desirable and therefore tends to pull house prices down a little. Heathrow is a good example of this, particularly in the light of the recent decision to build a third runway at the airport.
When it comes to investing in property, it pays to be savvy about what new transport infrastructure projects are being discussed, as they can cause prices in related areas to really soar. Two large-scale train lines in particular, Crossrail and HS2, demonstrate this trend perfectly.
The new Crossrail route launching in 2019, will run from reading and Heathrow, through the centre of London and out to Shenfield and Abbey Wood. Also known as the Elizabeth line, it is set to significantly improve commuting times from eastern and western areas into London.
This has already been having a noticeable effect on property along the route. According to Zoopla, since work began on Crossrail in 2009, homes close to stations on the new line have gone up by an average of £187,727!
Lawrence Hall of Zoopla has said: “With just under two years to go until the line is fully operational the impact on property values close to the 40 stops is becoming clear. Proximity to transport is one of the key requirements when Londoners and commuters look to buy property.”
And with a further ‘Crossrail 2’ route now under consideration, it could be worthwhile keeping an eye on how the proposals develop.
The UK’s second big high-speed train line, HS2, is looking to cut travel times to London from key cities in the Midlands and the North of England, including Birmingham and Manchester. The proposed routes will reduce travel times into London considerably. For example journeys from Manchester are set to reduce from 2hrs 8 mins to 1hr 8 mins. This will open up new areas as possible commuter hubs for those who work in London but can’t afford to buy a home in the capital.
There are predictions of house price rises of as much as 40% in some areas along the route. The prospect of this surge in demand is already drawing the attention of investors, who are betting on the potential property price rises making them the most in terms of capital appreciation.
When considering where to buy a property, whether to live in or as an investment, the local transport options are definitely a key factor to research.
If you found this article interesting, you may wish to read How Metrolink is Driving Up Yields in Manchester or World Heritage Sites Command Higher House Prices – How to Take Advantage.