Residential Investment – Crossrail tempting BTL investors away from Prime Central London
Crossrail has already triggered development hotspots and price growth along the line, with the higher rental yields on offer and potential capital growth luring Buy To Let investors away from Prime Central London. However, opportunities along the line still remain.
Due for completion in 2018, the new high speed 75 mile route will run from Reading in the West to Shenfield in the East and will, in certain areas, drastically cut journey times into the capital. Up to 24 trains an hour will run during peak hours, boosting London’s rail transport capacity by 10 per cent and linking London’s main employment centres with Heathrow airport.
As with all major transport upgrades, the line is proving a catalyst for regeneration, with large developers acquiring land along the line en masse and individuals now following suit. Historically, a significant number of these individuals would have focused on Prime Central London (Chelsea, Kensington, Westminster, Marylebone and the City of London), but stagnating growth and typically lower rental yields on offer – compared with the Greater London area – have prompted these investors to broaden the geographical scope of their portfolios.
In the West, Maidenhead and Slough have the advantage of not being under the Heathrow flight path and journey times to Central London will be reduced by up to 40 minutes. Hayes and Harlington station will have a spur to Heathrow and the developers are already moving in. At a recent sales launch in Hayes, 150 apartments were sold in 2 hours to a mix of investors and first time buyers with queues out of the door.
Ealing Broadway, West Ealing and Acton are also tipped to be major beneficiaries of the line. Ealing Broadway, for example, will benefit from a near 50 per cent reduction in journey times to Bond Street, the City, and Canary Wharf. Capital values here are lower than in nearby Chiswick and transport connections are superior.
With regards to Canary Wharf, as we look over to the East, the financial centre has been on the radar of savvy buy-to-let investors for a number of years now, though there is further growth to follow. For the first time, Canary Wharf will have a direct link to Heathrow, with a journey time of just 39 minutes. There are ambitions to double the area’s working population over the next 15 years; more workers will mean more demand for homes, and therefore greater returns for investors.
Neighbouring Royal Docks is also tipped to be a huge winner and is one of London’s major regeneration areas. Currently served solely by the Docklands Light Railway, the arrival of Crossrail will link residents to the West End in 15 minutes. Today its skyline is populated by cranes, a manifestation of regeneration and pending growth.
There are high-yielding residential investment opportunities arising across the capital due to the Crossrail project. With the general election behind us, thus a more certain political landscape, and an arguably more housing-market friendly Conservative government now in place, I would also expect to see a return in demand for residential property in Prime Central London.
PCL or Greater London, where should you invest? For a long term investment, 10 years or more, either option is a safe bet!
Daniel de Abreu is the Central London Area Lettings Manager for LIFE Residential. LIFE specialise in the letting, management and sale of new build apartments across the Capital and are well placed to advise on any aspect of residential investment.