Looking west to up-and-coming locations that have yet to see significant house price growth is key for investors
As Europe’s largest construction project, with 41 Crossrail stations over 21 London boroughs, the new Elizabeth line has surely been the capital’s most highly anticipated infrastructure scheme to date. With much talk of the Crossrail effect on jobs, economy and property price performance, do the numbers stack up? Many leading developers in the south east, including Strawberry Star, are encouraging prospective homebuyers and investors to look west beyond Ealing Broadway for capital growth returns and improved rental yield.
Crossrail growth to date
So far, the easterly section of the Elizabeth line has been the most resilient, with residential areas in the immediate vicinity of Harold Wood, Seven Sisters and Brentwood all recording some of the highest house price rises from January to September last year. In the west, one of the biggest winners has been the central area around Bond Street, where in the last seven years to November 2017, house prices rose an astonishing 166% to an average of £3.1million.
In fact, a recent Benham and Reeves report showed that the average house price surrounding the 41 Crossrail stations jumped 84% to £655,103 between 2008 and August 2019, compared with 57% in the wider areas around the stations. Last year alone, property values on the Crossrail route continued to outperform the wider market – rising by 2.1%. Yet to derail house prices, many property pundits are forecasting 4.7% average growth for property values near Elizabeth Line stations by 2021.
However, now side-tracked by multiple delays, experts are of the view that this growth is unsustainable, predicting a fall in prices. Indeed, according to new data from Savills, the average value of sales within 500 meters of a Crossrail station is said to have dropped over the past year. After an initial decade-long surge in property values along the route, this dip in prices is in keeping with the wider trend across London, after a year eclipsed by Brexit-related uncertainty and government elections, which impacted the property market.
Why this isn’t bad news for investors
Investors shouldn’t be disheartened by this decline, however, as this could be the opportune time for buyers to negotiate a good deal or invest in a buy-to-let property for longer-term gains.
“It is very likely another uplift is on the horizon once the project is finally completed,” says Santhosh Gowda, Chairman of Strawberry Star Group.
He continues, “Buyers need to explore areas on the very cusp of regeneration along the Elizabeth line for not just better value now, but much better prospects for future capital growth in four to five years. Areas close to Heathrow especially benefit from a strong rental market, keeping demand stable with yields of up to 4.7% .”
The long-awaited launch of Crossrail in west London is nearly in reach. A key area that has benefitted considerably has been Ealing Broadway, seeing a jump in house prices in the last three years. The transformation of Ealing is rapidly spreading west. While property values here have arguably already peaked, savvy purchasers are turning to lesser mentioned western hotspots, like Southall, for value for money, higher rental yields and better prospects of capital growth.
Southall tipped for growth
According to Rightmove, the overall average property price in Southall costs £381,850 , which is an astonishing 46% cheaper than neighbouring Ealing where an average house would set you back £711,552 . Furthermore, Southall is still considerably more affordable than nearby Norwood Green, where prices are £412,241, as well as West Ealing at £689,305 and South Ealing at £632,642. For buy-to-let investors, Southall was the fourth highest asking rent growth area in London, increasing 57% since 2008.
Crossrail has a proven track record of triggering economic growth, pushing property values on an upward trajectory for those within proximity of its stations – and in particular, those at its operating fringes. The average reduction in travel time for Southall commuters will be 15 minutes – potentially saving residents hours on their commute every week. Greenview Court development presented by Strawberry Star in Southall is currently taking shape, ideally situated to meet all the criteria for residents and investors to maximise on the Crossrail phenomena – both now and into the foreseeable future as regenerative growth continues to flourish.
Tipped for bright new things, Southall has just been awarded £4.4m from the Mayor’s Regeneration Fund, matched by £1.4m from Ealing Council and £1.9m from Transport for London. This investment will support the Shaping Southall project and help this unique area reach its potential. Southall’s Opportunity Area Planning Framework (OAPF) is also promoting the provision of affordable workspaces for small and medium-sized businesses located southeast of the station, encouraging new start-ups in the area. Alongside Greenview Court, new housing schemes in the area are some of the largest in the capital, with the former gasworks site being transformed into over 3,750 flats, alongside new shops, new schools, a 40-acre public park and miles of beautiful walks along the banks of the Grand Union canal. There will also be new cycle paths, exercise trails and improvements to the nearby Minet Country Park.
Gowda comments, “With Crossrail finally opening later next year, we anticipate a rush of buyers looking for homes in Southall where they can enjoy vibrant culture and properties at prices achievable to buyers, as well as a super-fast commute. Residents will be able to reach Bond Street in just 17 minutes, and Heathrow Airport in less than 8. Greenview Court development not only offers the perfect location in an up-and-coming community, but features luxurious contemporary finishes on the inside and a show-stopping series of landscaped terraces and podium gardens on the outside, to create the perfect space for residents to relax at the end of the day.”
Prices at Greenview Court start from £336,000 and will feature a stunning collection of studios, one-, two- and three- bedroom apartments. Completing in winter 2020, residents can enjoy private outside space to the majority of apartments, four multi-levelled private residents’ roof gardens and concierge services. For further information please visit www.strawberrystar.com or call 020 3811 0000.
|Strawberry Star Group
Strawberry Star Group (SSG), established in 2007, is a specialist provider of property investment and property management services to local and international investors in the London market. Investments, Acquisitions, Development, Homes, Sales, Lettings & Management and Asset Management comprise its core business. The company has £1.4 billion worth of Assets under Management.
Founded by Santhosh Gowda, an entrepreneur with 28+ years of rich experience in leading international property markets, SSG is a provider of high-quality property services. With presence in London and Asia, the company enjoys strong relationships with investors, local authorities, leading agents and world class consultants. The company plans to deliver 4,000 new homes by 2025.