London housing crisis: the mixed blessings of Crossrail

New analysis from Savills underlines the uplifting effect of rail links on the value of property. Or the distorting effects, if you prefer. House prices in many - though not all - areas within a 500 metre radius of forthcoming Crossrail stations have already been rising faster than in neighbouring ones further away, and there are still four years to go before any trains begin to roll.

Savills stresses that the appeal of faster, more convenient commutes is not, of itself, enough if the potential Crossrail creates for selling houses and flats is to be fully exploited: stations must be “accompanied by place improvement to achieve uplift potential”. That means attractive public realm - planning jargon for streets and squares - furnished with suitable shops and offices. Station locations where prices have not yet raced ahead of those in adjacent ones are those where Savills thinks the most money could eventually be made: the north-east section of the route containing Manor Park, Ilford, Seven Kings, Goodmayes and Chadwell Heath. It’s not going to be getting any cheaper in those parts any time soon.

The Savills report is illuminating stuff, providing insights into the complex interdependence of transport infrastructure and housebuilding, and of public investment and private profit, in London and its surrounding territories. It also brings back to mind the recent observation by Transport for London chief Sir Peter Hendy that unless low paid workers in outer London can travel easily and affordably into town “you risk social unrest”. Hendy noted, quite correctly, that there are greater numbers of poorer people in the suburbans than there used to be and that without lower fares “we’re going to leave [those] people behind”.

The same logic holds for housing. As everyone (including Savills) points out, the great, under met demand for homes in Greater London is among households on middle and low incomes. It may be that Crossrail-related “uplift” will enable a few more “affordable” units to be squeezed out of developers as part of planning deals than would otherwise have been the case (“viability” permitting, of course). But in the end, as with fares, the warped London housing market will not do the job. That requires public funding and more freedom for councils to build. Holding the price of a Crossrail ticket down will be of little use to people who can’t afford to live anywhere near a Crossrail station.