London’s recently opened public transport link, Crossrail, is vastly reducing journey times across the capital. Launched in May, the new service connects Reading and Heathrow in the west of the city to Shenfield and Abbey Wood in the east. The new service, named the Elizabeth Line after Queen Elizabeth II is set to revolutionise public transport in London and provide attractive new real estate investment opportunities to Middle East investors.
Crossrail will serve 41 stations, including ten brand-new interchanges, making it one of the UK's most significant infrastructure projects ever undertaken. As a result, house prices along much of the route have already risen steeply – and with the first trains on the rails, excellent future growth is anticipated for those who buy at the right time and in the right place.
ELIZABETH LINE TO BE A REAL ESTATE GAME CHANGER IN LONDON
The Elizabeth Line is intended to be a catalyst for regeneration in the city, bringing 1.5 million more people within a 45-minute commute of the major employment centres of the West End, the City and Canary Wharf and increasing rail capacity by 10%. The overall plans include integrating the designs for 12 major property developments, with the result that more than 90,000 new homes are expected to be built along the route.
According to a recent report by Savills, major rail projects almost inevitably lead to substantial increases in house prices. For example, five years after opening, the Jubilee [London Underground] extension saw local areas of the new stations increase an average of 7.3 per cent annual growth above the wider market. Five years after the Northern London line was upgraded and became part of the London Overground, areas around stations saw an average of 5.7 per cent annual uplift.
This upsurge in house prices has certainly been true for a few areas that are seeing the arrival of Crossrail. Research from Rightmove revealed some areas had experienced house price inflation of more than 100 per cent over the past ten years (compared with 55 per cent in London as a whole). The biggest jumps have seen a staggering 108 per cent in a decade, with averages increasing from £233,480 to £486,235.
CROSSRAIL AREAS GAIN INTEREST FROM MIDDLE EAST INVESTORS
Yet interestingly, while some areas close to Crossrail have already experienced a substantial uplift, others have not – which is why many of these areas are piquing the interest of Middle East investors. According to the research, only a third of the stations on the new line have seen a value uplift over the local market since construction began. Therefore, there are still ample opportunities to invest, particularly with the Elizabeth line now officially opened.
Several areas on the radar are yet to experience the Crossrail premium – for example, property prices around Acton mainline station have risen by a modest 3.8% annually since the start of the Crossrail project – but now that residents can reach Bond Street in just nine minutes on the Elizabeth Line that looks set to change. Meanwhile, Ealing Broadway is also on the list of areas with room to grow after experiencing just 4.3 per cent annual rises despite the imminent arrival of Crossrail3.
The quick, cross-London link is likely to benefit areas that previously missed out on London’s superb public transport network. We expect to see areas on the route become legitimate options for investors as the commuting times are reduced and are now on par with many of the prime outer London neighbourhoods. The most significant gains are likely to be seen in the areas out with the London underground network and those that now have easy access to Crossrail, ultimately becoming transport hubs in their own right.
In west London, thanks to the Elizabeth Line, commuting time from Hayes & Harlington station to Bond Street will take just 22 minutes, compared to an hour and 20 minutes beforehand. From nearby Southall, journey times are cut from 75 minutes to 20, and from Ealing Broadway from 23 minutes to just 12.
For investors from the GCC and broader Middle East region, there are still several opportunities to capitalise on the expected windfalls the Crossrail line will have on the property sector, both through price increases in property value and rental yields in the coming months and years.
TOP PICKS FOR MIDDLE EAST REAL ESTATE INVESTORS
HAYES & HARLINGTON – HAYES VILLAGE
Hayes Village development includes a new footpath, meaning the walk to Hayes & Harlington station takes less than 10 minutes. Previously a minor stop on the Great Western Main Line, the new Elizabeth Line services mean residents will be able to reach Heathrow airport in five minutes and the City of London in 27 minutes – giving Zone 2 travel times from a Zone 5 location, where homes are no dearer than similar properties in the borough without that incredible convenience.
Prices start from £336,000 for a one-bedroom apartment, and the area's capital growth of 19 per cent is expected in the next five years, according to CBRE, making this an ideal spot to take advantage of the ‘Crossrail Effect’ in action.
MANOR PARK STATION – NEW MARKET PLACE
New Market Place is a brand-new development of 277 studio, one-, two- and three-bedroom apartments, just off the high street in East Ham. It’s already well connected, just a seven-minute walk to East Ham Zone 3 London Underground station with services into the City in 18 minutes, but the arrival of Crossrail brings further options.
East Ham is in the London Borough of Newham, which will boast five stations on the new Elizabeth Line; Manor Park and Forest Gate, both within walking or cycling distance of the development, plus Stratford, Maryland and Custom House. Manor Park is just seven minutes from the Elizabeth Line to Stratford and 16 minutes to Liverpool Street.
CROSSRAIL FACTS & FIGURES
- The Elizabeth Line is just over 100km long
- 42km of new tunnels were dug under London by eight giant tunnel boring machines
- Each machine was a 1,000 tonne, 150m-long underground factory with 20 people working in shifts around the clock
- Over three million tonnes of excavated material from the tunnels was shipped to Wallasea Island in Essex to create a new 1,500-acre RSPB nature reserve
- ten10 new stations were built
- 200 million passengers a year are expected to travel on the Elizabeth Line
- Construction of Crossrail is set to add £42bn to the UK economy
- A fleet of 70 new 200-metre-long trains purpose-built by Alstom in Derby will run on the line
- Nine walk-through carriages can carry up to 1,500 passengers