CROSSRAIL DELTA LIMITED PARTNERSHIP
What Is Crossrail?
The UK’s biggest construction project is underwway, and there has never been a better time to consider investment. The Crossrail project is set to add £5.5 billion to the property market, supporting the construction of 57,000 new homes in and around London, with house prices expected to increase by 20% upwards.
The impact of Crossrail on property will be visible nationwide. It is estimated that it could prompt the delivery of 57,000 new homes, as well as a considerable quantum of commercial space around the central stations. Although the first lines won’t be operational until 2018, its impact is already being felt as the imminent improvements drive confidence and become key considerations in strategic investment decisions.
Crossrail will create new rail linkages across London and the South East, and strengthen existing ones. The substantial increase in capacity will help key retail and office districts expand, such as the West End and Canary Wharf, as well as allow new markets to emerge. In addition, Crossrail has the potential to reposition many locations that are currently considered tertiary; unlocking their dormant value.
Aside from the actual improvements to the transport network, Crossrail is also prompting a raft of wider investment and development above ground. There are extensive over-site plans for many of the stations, based around the concept of placemaking. Tottenham Court Road is a great example of an area that, despite it’s inherently good position, has been overlooked historically with it’s property market under-performing as a result. However, there are now substantial redevelopment plans underway that will see the creation of much more attractive and pedestrian-friendly public space at street level.
Since the commencement of the Crossrail project, house prices around the affected stations have increased by 20%. This is on top of underlying capital appreciation in London and the South East. Although this partly pre-empts the actual transport benefits and value increases that will be felt from 2018, at this stage it mostly reflects the swell of confidence into these areas and the physical regeneration already underway. We anticipate that these factors will continue to drive values around the affected stations, with house price growth in the region of 2.5% per annum until the first lines are operational in 2018. In absolute terms, this growth should add around £60,000 additional value per property on average over this five year build up. These increases are likely to be even more pronounced in Central London, at 3.7% per annum, or around £100,000 per property, over the next five years. Overall, Crossrail could add around £14.7bn to the residential property sector across the 37 stations.
In the western stations, where the reductions in travel times are the greatest, we expect some of the largest impacts on residential values outside of Central London. Our model suggests that Crossrail will trigger house price increases of around 2.9% per annum between Maidenhead and Acton, or around £50,000 per property over the five year period. This is roughly four times the average increase in East London, which is likely to be closer to 1.7% per annum, or £21,000 over the next five years.
Overall, the biggest winners will be Ealing Broadway, Farringdon, Paddington, Bond Street and Tottenham Court Road. Homes in these areas could see higher increases, of up to £100,000.
£35 Million is being invested in to properties in and around prime Crossrail locations. We are buying distressed properties, land with planning permission and off market purchases. We have excellent investment opportunities due to the Crossrail regeneration, proving to be what is considered by property professionals the most exciting investment opportunity in the UK.
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