In her second-part examination of how Crossrail will affect London’s property prices and infrastructure, Karen Tait heads east and discovers a development boom
From Farringdon in central London to Shenfield in Essex, the eastern section of Crossrail will create new transport hubs, including one of the biggest in London at Farringdon itself, with a completely new station at Canary Wharf. While prices are already rising around stations, the new line is also creating a development boom from Aldgate to Canary Wharf, creating desirable neighbourhoods within an easy journey of central London.
According to recent analysis from Knight Frank: ‘The demand on current transport infrastructure in East London has increased sharply over the last decade, partly due to new areas in this part of London gaining renewed traction as residential hubs. Crossrail will further open up these areas, adding to the transport capacity, and cutting travel times into central and west London.’
Generally homes within a 15-minute walk of stations in the eastern section have outperformed prices in the surrounding areas – Knight Frank’s Eastern Index shows a 21% uplift in prices since July 2008, compared to 18% in the local authorities where the stations are situated. The biggest rises have been around Maryland and Forest Gate stations, 37% and 35% respectively, compared to 16% in the wider Newham area.
Where prices have not kept up with surrounding areas, increased levels of development are expected to have an upwards effect on prices. In the walkzones around stations from Ilford to Romford, Knight Frank identified 10 new developments with planning permission or already under construction, delivering more than 1,500 residential units, with 28 more schemes in ‘pre planning’.
Around Woolwich station, average prices have risen by 25%, slightly under the 32% uplift in Greenwich, but Knight Frank counts 163 new residential units under construction within a 15-minute walk of the new station, with planning approved for 2,700 more, including 400 above the new station. The report states that ‘Such ‘place-making’ will likely create price uplifts and deliver value, as this area of London becomes a more highly connected place in which to live’.
While prices around Canary Wharf station have not matched the strong growth seen in prime outer London, the scale of development taking place also makes it an area to watch.
‘Canary Wharf has long been known internationally as a top London business district. Crossrail has the potential to enhance this, creating a residential destination as buyers increasingly consider the area as a place to live,’ comments Lauren Ireland, Head of Savills Canary Wharf.
‘There are some fantastic residential schemes, such as the Hoola building near the Royal Docks in E16, all built anticipating this change in dynamic due to the increased connectivity. Residents in Canary Wharf will be able to take advantage of new shops, restaurants and facilities in the shopping centre, whilst being just 13 minutes away from Bond Street and a mere six minutes from Liverpool Street and the City.’
Furthermore, JLL Residential Research’s report, Crossrail: Identifying Opportunities, notes that: ‘The western location of the new station will bring parts of Poplar and Limehouse closer to the improved connectivity and could spark further development.’
JLL also names Whitechapel and Woolwich as winners in the price stakes, with the report stating that ‘Woolwich may not immediately appeal to several developers because values are too low, especially away from the river, and there is already plenty of development activity. But a combination of shorter journey times, quality residential development and improved town centre aesthetics have the potential to significantly upgrade this location and raise values.’
Caspar Harvard-Walls of property buying agency, Black Brick, comments that: ‘Whitechapel has been popular in recent years with buy-to-let investors looking for good yields, and first-time buyers looking for an affordable location close to Shoreditch.
‘Whitechapel’s proximity to Queen Mary University and Royal London Hospital has made it a sensible choice for buy-to-let investors looking for inexpensive property to let in an area with high demand. It has been getting increasingly more expensive since the announcement of Crossrail – £300-£400/sqft in 2011/12 for an apartment in a private building compared to in excess of £600/sqft for an equivalent flat now.’
Commenting on Farringdon, Adam Stackhouse of Bective says ‘the area has not just transformed itself visually over recent years but also financially, as local property prices have rocketed upwards, well ahead of the broader price growth averages in central London’.
The agency recently marketed a block of apartments that was originally student housing. ‘We sold all the apartments in a matter of hours to investors from Hong Kong and Singapore, and were amazed by their detailed knowledge of Crossrail. It would appear that those looking at London from afar can more clearly appreciate the significant positive impact Crossrail is going to have on property values; it is these investors that are targeting ‘hotspots’ for extraordinary price growth over the medium term.’