To be launched in 2018, Crossrail is now not only an obsession for planners, engineers and architects, but is also being sold as a potential catalyst for much-needed housing investment and regeneration. Will the capital’s biggest infrastructure project, funded mainly by the public purse, help address its housing problems? The evidence suggests that, despite the praise, it may make them worse.
London, according to a recent study by PricewaterhouseCoopers, will be a majority-renting city (60%) by 2025. This majority is paying for Crossrail (recently unveiled as the Elizabeth Line) through their taxes and, soon, their fares. They will be rewarded with higher rents and house prices.
Estate agents and property developers, at least, are optimistic. “Crossrail has already triggered land purchases, development activity and price growth along its route but plenty of opportunities and gains still remain”, says JLL Residential in a 2015 report (pdf). Highlighting Whitechapel and Woolwich as “the biggest winners from Crossrail” with house price increases of over 50% between 2014 and 2020, the report also suggests “longer-term, but more opportunistic, locations” such as “Ilford, Forest Gate, Abbey Wood, Slough and Southall”.
Overall, JLL notes that although some Crossrail locations may not immediately appeal to certain developers, house prices will, on average, increase by 36% along the Elizabeth Line by 2020. Even before the first trains run, the property consultant CBRE is predicting “an average £133,000 price hike”.
How will this value uplift (pdf) affect renters? In an update on their original 2015 report, JLL highlighted areas that would be the main beneficiaries to rising rents along the Elizabeth Line. The “winners” were (again) Whitechapel, Woolwich and Ealing Broadway, which will all see rents increase by over 30% by 2020. Good news for landlords and developers; not so good for the 35% of Whitechapel residents who rent in the private sector, or for the tens of thousands of people across the city who need to claim housing benefit to survive in the private market.
So who are the true winners? Commuters are likely to suffer less and the physical construction of Crossrail has provided a welcome boost to employment. But when it comes to housing, the real, long-term beneficiaries will be estate agents, property developers and homeowners.
Indeed, they are already cashing in. Research from Knight Frank (pdf), another London-based real estate consultancy, indicates that “increased demand for property close to transport links has a clear relationship with price performance.” The authors of the research add that “the anticipation of new transport links also affects prices”, and that “on average, prices within a 10 or 15 minute walk from Crossrail stations have already outperformed prices in the wider local authorities … [On average] the outperformance is around 5%”. This is because “the anticipation of new transport links affects prices”. In Slough, for example, prices increased faster than anywhere else in Britain between February 2015 and February 2016.
Cities other than London might have appreciated some of the £14.8bn being spent on Crossrail, one of the largest construction projects in British history. Yet despite criticism over the capital’s large slice of national infrastructure spending, the Crossrail project has been praised across the political spectrum as an “incredible feat of engineering” (David Cameron) and as “the backbone of the transport infrastructure for London’s business and financial service sector” (Ken Livingstone).
While the Elizabeth Line – a multibillion pound public investment – is promising opportunities, gains and unlocked potential, it is increasingly clear that this promise will not trickle down any time soon to those who don’t own property.
Harry Blain is a researcher at LSE Cities, London School of Economics and Political Science.
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