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here to see a map of all new transport links in the UK and some properties
for sale
The controversy surrounding the approval of a third runway at Heathrow - in a
scheme to be completed by 2015 that may also bring a new north-south rail
line in 2027 or thereabouts - has overshadowed the more imminent arrival of
improved transport links elsewhere in the UK. There is considerable
excitement, for example, over the extension of the East London Line to
Dalston, and the new tram in Edinburgh. But are such new or upgraded
services sufficient reason to buy in a location? Or must the benefits of an
easier commute be weighed against other lifestyle considerations, especially
in the current difficult market?
It is true that transport links, through the jobs that they bring and the
increased desirability of the area, can have a strong upward influence on
property prices. Jon Neale, the head of residential development research at
Knight Frank, says: “People are always going to pay a premium to be within
ten minutes of a Tube station, or for easy access to an airport.” However,
there is no guarantee of an uplift, as we report below:
LONDON
One transport link well on the way to completion is the new East London
Railway station in Dalston. This gritty, run-down and underdeveloped area
has undergone patchy regeneration in recent years with an overspill from
nearby trendy Stoke Newington and a flurry of investors hoping to take
advantage of its proximity to Stratford, home of the 2012 Olympics. But it
is the expected opening of the station in 2010 that has attracted interest
in the past two years. The extension of the former East London Tube Line
will run from West Croydon and Crystal Palace to Dalston Junction, and will
connect with the Tube network at Whitechapel. A second phase, due to open in
2011, will continue the line through Canonbury to Highbury & Islington
Tube station. The average house price has already risen from £187,800 in
2001 to £317,959 in 2007, according to Hometrack, and gentrification has
arrived in the form of the Dalston Culture House and the relocation of the
Vortex jazz club to new premises, as well as several new restaurants. But
with the project having been mooted for several years, many buyers have been
waiting to see it to believe it.
Richard Scotford, director of Location Location, an estate agency in Hackney,
believes that the new line will bring a marked difference: “When the overall
market recovers, I think we will see an incremental rise of 10-20 per cent
as a result of the new station.” But buyers must be prepared to wait. “The
change will not be instantaneous. Some people who would never have
considered living in an area without a Tube line will come immediately.
Others will wait for the retail and restaurants.”
Scotford urges buyers to be aware that retailers may not arrive immediately to
the area becaue current leases will take a while to expire. But it should
not take too long. The first phase of Dalston Square, the housing and retail
development by Barratt Homes that will also house the station, is due for
completion in June, with many of the commercial spaces already sold. More
than half the one to four-bedroom flats of the first phase (£230,000 to
£500,000) have already sold. However, Scotford reminds buyers that - despite
the hype - the line's remit is limited to East London, with an interchange
with two Tube lines and the proposed Crossrail1 at Whitechapel.
There are also bargain period properties to be picked up, Scotford says, in
particular the Victorian and Georgian houses east of Kingsland Road and
north of Dalston Lane, where a decent-sized two-bed flat may cost you
£250,000. These could need quite a bit of work but represent a good
long-term investment.
EDINBURGH
Edinburgh has also undergone plenty of regeneration in recent years, spurred
on by the popularity of the Edinburgh Festival and the Fringe. As a result,
property prices have risen and investment has expanded out of the New and
Old towns, in particular towards the waterside area of Leith, which will be
connected to the centre and to the airport, west of the city, by a new
tramline, due for completion in 2011. Leith, like Hackney, has a lingering
reputation for violence, seedy clubs and rundown flats. But, with its views
of the estuary and splendid seafood pubs and restaurants, it has been
attracting savvy investors. Average house prices have crept up a little -
from £136,941 in 2004 to £181,780 in 2007, according to Hometrack - but are
nothing compared with those in the New Town: £365,000 last year. In Leith
you can now pick up a two-bed flat in a trendy converted warehouse for about
£220,000.
David Sangster, a partner at Neilsons estate agents, says that because Leith
already has good bus links the tram will not make it much more convenient to
reach. It will, however, make it much easier to market to foreign property
investors and to British investors hoping to rent to tourists during the
Festival. “People like the idea of a tram. It worked in Barcelona and
Berlin,” he says. A 2005 report by the Passenger Transport Executive Group
found that all UK tram schemes have led to increases in commercial and
residential property values, in some cases by 15 per cent. Rental prices
have risen by 7percent.
Sangster's hot tip for buyers is Galashiels, a small industrial town in the
Borders, 36 miles south of the Scottish capital and home to the textile
college of Heriot-Watt University. A re-opened rail link will connect it to
Edinburgh, reducing travel time from more than an hour to only 45 minutes.
Although work on the link is not due to start until 2010, Sangster says that
there is already a buzz among Edinburgh residents about it.
KENT
Several towns in Kent will be better connected to London with the arrival of
the high-speed domestic rail services, due to start in December this year,
as well as the long-awaited Crossrail link connecting Maidenhead and
Heathrow in the west to Shenfield and Abbey Wood (via Paddington and
Liverpool Street) in the east. But estate agents say that, like Dalston,
price rises and profits may be a long time coming, especially with
Crossrail, which will not be completed until at least 2017. Prices in Abbey
Wood, southeast London, rose by 20 per cent between 2003 and 2008, according
to the Land Registry, but that was well below the 54 per cent across London
as a whole.
A better bet is Folkestone, from where the commute to London will be reduced
from 90 minutes to 56 minutes in December. You can pick up a decent postwar
two-bedroom flat for £150,000. Brendon Driscoll, a sales negotiator at Fell
Reynolds estate agency, says: “We have had quite a few inquiries from
Londoners looking to move out, and from people looking for second homes who
want somewhere that's well connected. Interest in families from
Buckinghamshire is up about 25 per cent on a couple of years ago.” The
high-speed link will also stop at Stratford. However, a note of caution to
investors looking to make an easy buck renting out properties during the
Olympics: there may be some changes to this route during the event.
MANCHESTER
In Manchester, several extensions to the Metrolink tram system have recently
been put on hold, including one to the town centres of Oldham and Rochdale
in north Manchester, although an extension to their out-of-town railway
stations will go ahead. Property prices in these rundown satellite towns
have remained steady for the past few years and the average price of a
property in Oldham is £59,220, according to Hometrack. But with projects
such as an £80 million athletic stadium and housing development also on
hold, agents are concerned that much-needed regeneration of the town centres
will not now come, and that property prices will be adversely affected.
However, there may be other areas of Manchester ripe for investment - a tram
link extension to Salford Quays, where the BBC is relocating various
departments in 2011, will go ahead.
SO WHAT'S THE VERDICT?
Agents are agreed on one thing: if you want to avoid being left with a
property that is inconveniently located and harder to sell or let, make
absolutely certain that the transport link is going ahead before you invest.
Jon Neale says: “Just like you should never buy a foreign property purely
because Ryanair has started flying there, you should never buy a property
purely on the basis of transport unless it will definitely be built and will
be there for the long term.”
He adds: “Transport is not a magic wand that makes property prices shoot up -
there are many other variables, like good schools or nightlife. During a
period of restrained growth we might see a bigger differential in previously
deprived areas with potential, like Dalston and Leith. But do your research
- if transport is your only incentive, it might not be a big enough draw,
especially if it never materialises.”
CASE STUDY
Andrew Manley, 31, had been looking for a property to buy in Hackney for a few
years before he found his one-bedroom flat in Dalston Square last year. “I
had been living in Hackney for about five years and had been looking in less
accessible places, like Hackney Central and London Fields.”
Mr Manley, who works for a charity, can take the North London railway line
from Hackney Central to work in West Hampstead, but he is looking forward to
being on top of the new East London Railway line. “I have lots of friends
south of the river, mostly in Lewisham, and the new line will make it so
much easier to get down and see them. If you don't live near convenient
transport links in London, there are some people you just never see.” He
will still be able to get to work quickly by hopping on the North London
Line at Dalston Kingsland.
Mr Manley bought the flat off-plan last October for £250,000, via the HomeBuy
First Time Buyers' Initiative, a shared equity scheme that can provide
buyers with a loan of up to 50 per cent. In August, Abbey had agreed to give
him a two-year tracker mortgage for the remaining 50 per cent.
Mr Manley is looking forward to the arts and culture scene that has sprung up
in Dalston in recent years, as well as being somewhere with better transport
links. “For a long time I didn't think I could afford to live somewhere like
Dalston, because I was trying to be prudent and avoid a 100 per cent
mortgage. But the prices there are actually still quite reasonable.”
The bustle around the new station will not bother him, he says. “It's better
to be in the thick of things with a bit of noise, than quiet and far away.”
barratthomes-dalstonsquare.co.uk
