Crossrail was one of the largest infrastructure projects in Europe. With construction originally starting in 2009, the central section opened in time for the Queen’s Platinum Jubilee. It was originally supposed to open in 2018 and the total estimated cost increased from an initial budget of £14.8bn to £18.8bn.
Of course, we now know Crossrail as the Elizabeth Line and it is already living up to the hype. Over one million journeys were made on the central section in the first five days of its opening. Journey times between Abbey Wood in south-east London and Paddington have been cut by almost half to around 29 minutes, while journeys between Farringdon in central London and Canary Wharf will now take about 10 minutes rather than 24.
The real benefits of the Elizabeth Line will be felt next year when the line is fully operational. It will link 41 stations over 100 kilometres from Reading and Heathrow in the west, through central London, to Shenfield and Abbey Wood in the east and will give 1.5 million additional people access to central London within 45 minutes.
Ever since the project was given the green light, house prices on the route have increased. Recent Rightmove data shows that many areas near stations on the line that was previously lesser connected to key commuter hubs such as Liverpool Street or Paddington have seen a surge in prices and interest from buyers and renters. Areas further out from the centre of London which have lower asking prices
or rents, are now more easily commutable because of Crossrail and will be attractive to new buyers and tenants in search of somewhere affordable to live near the capital.
The benefits of regeneration have already had a marked effect on prices in previously less well-off areas. For example, Maryland Station in Newham, which Rightmove says provides an additional option for those commuting near well-connected Stratford, has seen the biggest increase in asking prices, more than doubling compared to 10 years ago (+108%) from £233,480 to £486,235. This compares to the London average increase over the past decade of 55%.
Meanwhile, Twyford, at the end of the western section of the line and the next stop along from Reading, has seen the biggest jump in the number of buyers contacting estate agents, more than tripling compared to 10 years ago (+245%).
Those now looking to buy near Abbey Wood station, at the end of the South East section of the line, face the stiffest competition from other buyers. Competition, measured by the number of people enquiring about each available property in an area, has risen by more than nine times (+869%).
While total buyer demand has risen the most in western areas, prices and competition have risen most in eastern areas.
The story for landlords is a similar one., as rising rents in London have seen average asking rents reach a new record of £2,195 per calendar month, up 14% compared to this time last year.
Southall has seen the biggest increase in the number of tenants contacting letting agents compared to 10 years ago, more than quadrupling (+372%). Asking rents near Southall station are lower than nearby Hanwell or Ealing.
Asking rents have increased the most in western stations Slough (+44%) and Burnham (+43%) while those looking to rent near Custom House station face the most competition from other renters.
Custom House, one of the new stations built for the Elizabeth Line and benefit from significantly lower travel times into central London, has seen competition increase by 33 times (+3270%) compared to a decade ago.
This is not to say that opportunities for investors are over. As the Elizabeth Line is only operating in the central section until the rest opens next year, the full benefits to the station on the east and west outer sections have not yet been fully realised. Indeed, we believe there is a good case for investors to purchase properties in need of refurbishment, as there are still profits to be made from adding value to houses and flats.
Equally, with rental demand strong in the relatively cheaper areas now in commutable distance to London, conversion of properties to HMOs could also reap rewards to landlords (in areas where there are no Article 4 Directions, which put planning permission requirements on HMO conversions).
Bridging finance is the ideal way to fund such refurbishment and conversion; it provides rapid finance so works can begin quickly and a number of lenders, including London Capital, can fund up to 100% of refurbishment costs.
With the Elizabeth Line being responsible for the largest single increase in central London’s rail capacity in more than 70 years, the capital is set to welcome increasing number of commuters, despite the changes in working practices since the onset of the Covid-19 pandemic. The window of opportunity for investors has not yet closed, but they need to move quickly.
