High Speed 2 and the effect on house prices

High Speed 2 and the effect on house prices

Property experts Tepilo take a look at HS2 and it's potential impact on property prices along it's route.

Back in 2003, high-speed rail had arrived in the UK with the introduction of HS1, which connected London to the Channel Tunnel.

Efforts to implement HS2 have, however, been dogged by delays, controversy, strong opposition, legal challenges and worries over cost.

The first two phases of the line, which would link London, Birmingham, the East Midlands, Leeds, Sheffield and Manchester, have been approved by the government, but the exact nature of the plans or routes have yet to be confirmed or finalised.

Work on the first phase is set to begin in 2017, reaching Birmingham by 2026 and fully finished by 2033. However, given how slowly things have moved so far – and the strength of opposition against HS2 – these completion dates are far from set in stone.

Those who are in favour of a new high-speed rail service insist that it will bridge the north-south divide, helping to bring investment and economic growth to areas in the north and the Midlands.

Opponents, however, question how much HS2 will actually end up costing, while also saying that there are better value projects that the UK should spend its money on instead, for example the (far cheaper) upgrading of the East and West Coast main lines and bus and tram initiatives in the Midlands and the North.

There are many arguments for and against HS2 – ranging from social, economic and environmental considerations to debates about capacity, technology and national pride. While we could be here all day analysing the ins and outs and pros and cons, we thought we would instead look at the places that would be likely to benefit most from HS2 and where their property markets stand at the minute.

 

PHASE ONE: London to the West Midlands

As we’ve seen with Crossrail, a major transport project can have a significant effect on house prices. In the same way places like Reading, Maidenhead, West Drayton, Shenfield, Romford and Chadwell Heath have been beneficiaries of the “Crossrail effect”, the stations on the London to West Midlands route are likely to see an uplift in prices from a similar “HS2 effect”.   

The Phase One route has four station stops – London Euston, Old Oak Common, Birmingham Interchange and Birmingham Curzon Street.

 

London Euston

First opened in 1837, this famous old station will get a makeover if HS2 goes ahead. As you’d expect, given its location and its close proximity to King’s Cross and St. Pancras, the average asking price is on the high side – currently standing at £599,664, according to Rightmove.

 

Old Oak Common

An area of London, situated between Harlesden and East Acton, that is best known for its railway depots and industrial estates, Old Oak Common would be given a shot in the arm by HS2.

A brand spanking new transport hub would be created by 2026, with stations for HS2 and Crossrail as well as Underground and Overground services. 25,000 new homes would also be built.

Average asking prices in nearby East Acton are currently around the £550,000 mark, while in Harlesden it’s a slightly more affordable £450,000 - £475,000. In both these areas prices have risen massively in the last three years and the arrival of HS2 would be another major fillip for an increasingly popular part of north-west London.

 

Birmingham Curzon Street

As Birmingham Interchange doesn’t exist yet – and will be located in an area where there are few houses around; on the opposite side of the M24 motorway to Birmingham Airport, Birmingham International railway station and the NEC – there is no point in looking for house price data here.

Birmingham Curzon Street, on the other hand, is located right in the heart of the city centre. The old Curzon Street railway station opened in 1838 but closed down permanently in 1966. The proposed new station would be built partly on the site of the historic one, where the original Grade I listed entrance building still survives.

The UK’s second city, which is generally seen as one of the most affordable locations for buyers, currently has an average asking price of £169,373, up by 6% in the last year. The arrival of HS2, even though it’s a decade away, is likely to give a significant boost to house prices in the area.

 

PHASE TWO: The West Midlands to Manchester and Leeds

The route of Phase Two, which is still undecided, is currently set to form a Y-shape, running north from Birmingham. The eastern leg will link Birmingham to Leeds via an East Midlands transport hub and a new station in Sheffield’s city centre.

Meanwhile, the western leg will connect Birmingham and Manchester (via a new station at Manchester Airport). There have also been proposals for another hub station at Crewe, to serve North Wales, Merseyside and the North West. It is currently under consideration by the government.

With the exact route of Phase Two still very much up in the air, it’s hard to know for sure which places will definitely benefit. But the likes of Sheffield, Manchester, Leeds and Crewe, if the proposed plans for a station there are accepted, would all be likely to see a positive impact on house prices.

 

Crewe

The Cheshire town is already home to one of the oldest and most famous railway stations in the country. If HS2 goes ahead, and Crewe is a stop on the western branch of Phase Two, the average asking price – which is currently less than £150,000 – would no doubt rise significantly, while jobs, investment and much-needed regeneration would be brought to the area.

 

Toton

The proposed East Midlands hub would be situated here, a small suburb between Nottingham and Derby that few would have heard about before. The current average asking price in the village is around £200,000, which would be expected to rise with the added jobs, houses and accessibility HS2 would provide.   

All of this is a long way off – with Phase One set to be completed by 2026 and Phase Two by 2033 – and it may still not yet happen, but if it does go ahead as proposed the areas involved are likely to experience their very own “Crossrail effect”.