Fast trains boost London fringe homes by 29% before tracks open

Bloomberg

Home prices are surging in London’s outer districts as improvements to rail networks and lower prices lure Londoners further out of the expensive city center.
Home values in West Ealing, where the commute time to London Liverpool Street will fall by half when a Crossrail train station opens in 2019, climbed 29 percent in the 12 months through February, according to a Bloomberg analysis of preliminary Land Registry data. That compares with a 12 percent increase for London as a whole, the data showed.
“West Ealing was a no-brainer for us,” said Rosie Nesbitt, group director of sales and marketing at Fabrica, a London-based developer that is building 770 homes within a six minute walk of the neighborhood’s new Crossrail station. “We’re selling incredibly quickly and it’s all about the transport.”
Property prices in London’s best districts have risen almost 30 percent in the past five years, according to broker Savills Plc, forcing buyers away from the costlier central neighborhoods such as Islington and Fulham. That’s boosted demand in cheaper districts further out that will be served by the 14.8 billion-pound ($20.9 billion) Crossrail project.
In Palmers Green, where the commute to Moorgate station in the City of London financial district can take as little as 20 minutes, values jumped by more than 33 percent in the period. Average house prices in the area now stand at 1.47 million pounds, according to broker Foxtons Group Plc, compared with 2.35 million pounds for houses in Highgate, an area about two miles closer to the City with the same travel time.
“This is a search for value by Londoners,” said Johnny Morris, head of research at Countrywide Plc, the U.K.’s largest real estate agency. “They’re prepared to go a little further out to get more for their money and get bigger
properties.”
Crossrail, approved in 2008 to cut journey times across London and the Southeast, is Europe’s largest construction project. Though it’s not due to start operating until late 2018, homebuyers are flocking to areas that will be served by its stations and the trend is set to continue, according to Neal Hudson, an associate director of residential research at Savills in London.
In 2013, Fabrica sold private homes in its Jigsaw development, which features tree-lined boulevards, period architecture and parks, for an average 480 pounds a square foot, according to Nesbitt. Since October the developer has pre-sold 70 percent of the project’s second phase for an average of 700 pounds a square foot.
“Buyers are typically savvy young professionals squeezed out of other more central areas and looking for a quick commute to the City,” Nesbitt said. The future 21 minute-journey to Liverpool Street compares with a 27-minute trip from Ladbroke Grove in west London, which is about five miles closer.
People relocating from the city accounted for 30 percent of sales in the capital’s commuter belt in the first quarter, according to Sophie Chick, an associate director of residential research at Savills in London. That’s up from 23 percent a year earlier.
“The trend of people moving further and further out is going to continue” she said in a telephone interview, “In the next five years, those commuter markets will outperform more central locations.”