Crossrail may provide major property boost

by Gary Whittaker

The lack of supply of housing in London and the south-east is a perennial issue. No matter how much investment in new homes and infrastructure takes place, the demand continues to rise along with the population.

A London of ten million 

That may also be true of the UK as a whole, but to a lesser extent; London and other large cities have higher levels of demand than their surrounding areas. The capital is expected to see its population rise from the 8.7 million living there now up to ten million by 2030.
While many will still want to buy homes in and around London, the cost of doing so will remain prohibitive for a large number of people. This is likely to be the case despite the current level of house price inflation being, unusually, below the national average. 

This current trend can be attributed to the economic uncertainty caused by Brexit and its likely disproportionate impact on London as a financial centre, but the lasting legacy of years of high house price inflation remain. 

Aside from the pains the Brexit transition will bring, few would doubt that London will remain an important global city and that in the long term, it is likely to remain so. Thus it can be expected it will go on growing. The same will also be true of many major regional cities such as Manchester, Leeds and Birmingham, not least because of a governmental focus on the 'Northern Powerhouse' and 'Midlands Engine'.

Transports of delight 

Much of that emphasis has been manifested in transport infrastructure, and this has made it easier to attract investment. New lines and stations are honeypots for developers - and thus landlords and letting agents - as it means the people living in the homes that are built can commute more easily. The infrastructure is already there in city centres and getting better - an example being new tram links in Birmingham - but is increasingly appearing elsewhere.

A new study on Crossrail has shown how this is also true when links to the suburbs and commuter towns improve. The Elizabeth Line - the east-west Crossrail that will come into operation in phases over the next few months - was expected to spur the building of 57,000 new homes by 2021. However, the analysis by property consultancy GVA has indicated the actual number is set to be nearly 91,000, and almost double that many by 2026. 

Naturally, Crossrail bosses are delighted by this. Chief executive of Crossrail Limited Andrew Wolstenholme said: "Crossrail is delivering more than just a railway, as well as cutting journey times and giving passengers more options, it is driving regeneration across London and the south east."

The building of new homes inevitably means more rental properties will be provided, whether by future acquisition or through build-to-rent schemes.

Think big, think small 

Moreover, while big projects like Crossrail and HS2 will have a large impact, there are numerous smaller undertakings that will have the same effect on a smaller scale. 

This week saw the government announce the allocation of the first £866 million of its £5 billion Housing Infrastructure Fund. This will be split across 133 council-led projects across England aimed at providing the infrastructure needed to facilitate new housing developments. 

Schools, remediation work and flood defences will be among the things money is spent on, but transport infrastructure is perhaps the most important, particularly roads. Indeed, the two largest funding awards are for new roads - with £10 million to be spent on highways near the 3,300-home Ashton Green development in Leicester and on a new bypass at Botley in Hampshire, where 1,000 homes are to be built.

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02-February-18General Lettings News