Earlier this month, Prime Minister Boris Johnson confirmed that plans to build HS2 would go ahead. Here’s how it might affect house prices.
Plans to connect London to the Midlands and north of England via a high-speed rail link have once again been given the green light by the government. The controversial proposals have been under debate after the projected costs for the scheme had more than doubled, while the time frame has seen yet another extension.
However, the latest affirmation for HS2 is being hailed as a hugely positive step for the UK by its supporters. The new line will shorten travel times between the capital and the rest of the UK, boost capacity, create new jobs and reduce the impact of the existing north-south divide across the country. The government also says the line will increase output and boost the country’s economy.
HS2 is currently the largest infrastructure project in Europe, and its implementation will no doubt affect the economies of the areas it passes through. House prices in these locations will almost certainly be influenced by the new line over the coming years – and to some degree this impact is already being felt.
What are the plans?
The proposals remain largely the same as they were before Boris Johnson’s latest announcement, but with slightly extended timeframes. Phase one, connecting London to Birmingham, is now due to complete between 2028 and 2031, and will reduce journey times between the cities to just 52 minutes. Phase two is then expected to complete between 2035 and 2040, and will see the connection extend from Birmingham up to Manchester, Leeds and hopefully beyond.
The following representation was published by the BBC:
What about house prices?
How the HS2 project will affect house prices will depend on the location of the property in relation to the new route. Ultimately, any major improvements to transport in an area are likely to boost its attractiveness to prospective residents, and as a result this will push up house prices.
The effects have already been seen in many areas just from the promise of the future railway line. In Birmingham, a number of major regeneration and property investment projects are currently underway, and many investors have cited HS2 as part of their reason for backing these projects. Those who invest now are expecting major house price appreciation over the coming years as HS2 comes to fruition.
In an analysis by the Guardian, it takes examples of how past infrastructure projects have affected house prices. When the M40 was extended from Oxford to Birmingham in 1991, house prices in nearby Warwick increased, according to the report, because the town was now within easier commuter distance of the city.
Crossrail in London is another good example. Despite delays, properties along the line have already doubled in value since 2008, even through the financial crisis, when the new line was given the go-ahead. According to Benham and Reeves, this is expected to grow by a further 4.7% between now and 2021.
According to the Guardian report, properties within a 10 to 15-minute walk of stations along the Crossrail line are expected to see house prices rise by between 30% and 60% over the construction period.
However, on the flip side when looking at HS2, properties that are very close to the new line could see depreciating value, according to Property Road. It says homes within 500m of the line could see house prices harmed in the short-term because of disruptive building works as well as increased traffic levels in the area during construction. This is something to bear in mind when selecting a property close to HS2.
Places to invest
Birmingham is the first place set to benefit from the new HS2 line. Not only will the project itself create new jobs in the area, but a number of major firms have already begun to open offices in the city ahead of the transport improvements.
With the promise of better accessibility, house prices are expected to increase in the area as more people choose to live and work there. For property investors and homebuyers alike, the sooner you make an investment in the city, the more likely you are to see house price appreciation as the HS2 project progresses.
When the second phase comes in, cities such as Manchester, Leeds and Nottingham will come into its remit, slashing travel times to the capital. Similar to Birmingham, these cities have also seen more businesses open offices there, attracting a bigger talent pool and more residents.
Even more peripheral towns are expected to be boosted by HS2, as the plans will also include improvements to existing lines. If you’re looking to buy away from a major city, in a place where house prices could see a boost, it’s worth keeping an eye on areas that are within easy travel distance of the new line.
Birminghams landmark residential skyscraper. Contact us for more information and we can keep you up to date with projects close to the new HS2 line.
Credit Source: Eleanor Harvey