A leaked business case from TFL to the government this week revealed that Crossrail 2 could be delayed by a decade, as a funding shortfall jeopardises the final go-ahead from ministers.
As the future of the line is called into question, the latest Landbay Rental Index, powered by MIAC, reveals that a significant uplift in tenant demand in the four and a half years since the route was announced has pushed up rents in 13 of the 15 affected local authorities, and by 21.5% around north terminus Broxbourne.
When the route for Crossrail 2 was first announced in February 2013, rents were falling in 7 of the 15 local authorities set to house the new line. In the year that followed, a dramatic uplift in tenant demand saw rents grow in all but one, Epsom. Overall in the four and a half years since the announcement was made, 13 of the 15 affected local authorities have seen notable rent rises, most notably in the North and West extremities of the line, namely: Broxbourne (21.5%), Enfield (13.8%), Haringey (11.4%) and Spelthorne (10.5%).
However, while tenant demand indeed grew quickly until 2016, the government has begun to drag its feet on the final approval of the new infrastructure project, and rents have once again begun to fall, almost across the board. Only Enfield saw rents grow (0.4%) in the past year, although by September rents had fallen here too, by -0.2% last month. Meanwhile Broxbourne (-1.75%), Richmond (-1.13%), and Spelthorne (-2.16%) are all showing signs of dwindling tenant demand.
As London rents return to growth in September, after falling for 15 consecutive months, there are signs that demand for rental accommodation could again be rising in the Capital, putting further pressure on the government to follow through on its pledge to release an extra £2bn of government cash for local authorities across the UK to build more affordable housing.
John Goodall, CEO and founder of Landbay said: “The idea of a north/south London railway dates back to the 70s, but it was only in 2013 that we found out where Crossrail 2 would actually run. Planned infrastructure is a key driver of tenant demand, so rents and property prices along the planned line quickly followed suit. But news that the line may now be delayed by a decade is nothing short of a hammer blow to all those that have had the foresight to plan that far ahead.
What’s needed by tenants, landlords, buyers, business, and builders is a clear commitment from the government that the project will be delivered in 2033 as expected. Not only to help people and businesses plan their lives ahead, but also to allow adequate time for local authorities to plug housing shortfalls before demand spirals out of control.
For example, the latest £2billion social housing pledge is an encouraging sign that the government is taking seriously the UK’s housing shortage, but this could and should be linked to the UK’s infrastructure plan, to spare any nasty surprises down the track.”