Newly released data from estate agent comparison site, GetAgent.co.uk, has revealed the impact the third runway at Heathrow has already had on the local property market and how this could impact prices once the expansion has been completed.
Since June of last year when the proposed expansion was approved by the House of Commons, house prices around areas due to be affected have fallen by -2.6% on average.
Windsor and Maidenhead has seen the largest decline with a drop of -6%, while prices have fallen by -4.4% in Wandsworth, -1.5% across Hillingdon and 1% in Richmond, and price growth has ground to a halt in Hammersmith and Fulham with almost no change.
While Gatwick missed out on the bid for a third runway, permission was also granted to expand the North terminal in June. While the implications aren’t as detrimental to the surrounding area as a third runway, prices in areas surrounding Gatwick have also dropped by -0.9% on average. This climbs to -4.2% in Tandridge, -3.2% in Crawley and -2.1% in Mole Valley.
But is this knee-jerk price drop here for the long-term? Or will these improvements benefit the wider property market once completed?
GetAgent also looked at previous airport expansions across the UK and found the surrounding areas had actually seen property prices uplift despite this work.
In 2008 the proposal of a second runway at Stansted saw local house prices fall by -2.6% on average between the announcement and the withdrawal of that proposal in 2010. But despite the continued and extensive terminal expansion at Stansted, prices have rebounded by 56% since that point.
The highest increases have been in Braintree where house prices have nearly doubled (+95.1%) and Chelmsford where they’ve grown by 70%.
Since the second runway was completed at Manchester Airport in February 2001, property prices have lifted by 26.6% on average, with the Trafford District (33.2%) and the Stockport District (27.2%) seeing the largest uplifts.
House prices in areas surrounding Birmingham Airport have increased by 31.1%, 33.5% in the Birmingham District alone, since the completion of the runway extension in May 2014.
While Luton only unveiled its new terminal in December of last year, prices in the surrounding areas have already crept up by 0.4% on average.
Colby Short, founder and CEO of GetAgent.co.uk said, “There’s no doubt that the construction of a third runway is going to hurt house prices for those directly impacted, either due to the expansion itself, or the resulting noise pollution from an increase in air traffic over the area.
“With the latest campaign against the third runway at Heathrow now rejected we could see prices continue their downward trend as the reality sets in and buyer demand dwindles.
“However, when looking at other areas of the UK to have seen similar expansions, the long-term impact may not be as detrimental to the local housing market as first thought. Improvements in travel infrastructure usually bring a wider economic benefit to the local area and this tends to filter down to the property market.
“That said, the implications of this particular expansion are arguably on a much greater scale and so only time will tell if the local property market can recover from the blow it has been dealt.”