HS2 is set to boost the UK economy, employment opportunities and housing market significantly – in fact, although the project is years from completion, it is already having a tangible impact on cities across the UK that are set to benefit from HS2’s construction. But just how significant will the project be for house prices? Will HS2 disrupt the London bubble? And precisely why is the rail network having such a positive impact? Centrick investigates…
Following Rishi Sunak’s amends to HS2 planning, the rail network will now run from London to Birmingham. The line from Birmingham to Manchester was cancelled in Autumn 2023 to mixed reactions, and prior plans to connect to Leeds and the East Midlands were scrapped prior to this.
HS2 comes with a plethora of benefits for the UK economy, all of which in tandem will produce a significant boost to house prices in regions impacted by the new line.
Whether it’s in the creation of the stations, laying the tracks, carrying out organisation or administrative tasks: HS2 will bring plenty of job opportunities. In fact, the project has already produced over 27,000 job opportunities, with more in the pipeline as work on the network progresses. Most importantly, once HS2 has been completed, the scheme will bring long-term careers, with the need for station employees, signallers, engineers and many other roles to be filled. This will have a positive impact on house prices, increasing demand in the areas surrounding HS2, as this new workforce will need somewhere local to live. Opportunities are available for those with all skill levels, with perhaps the most impactful opportunities being available for young people who wish to develop their STEM-related knowledge. These buyers and renters of the future will undeniably require accommodation, hence the estimated boost in property prices in key HS2 cities by up to a huge 60%.
HS2’s pledge to create a cleaner Britain is making the city a more viable place to live for those concerned by emissions. The rail network’s new dedicated inter-city lines will free up space on existing lines for local commuter routes, encouraging people to use public transport as opposed to cars. What’s more, HS2 will run on electricity as part of the decarbonisation of the broader National Grid, getting Britain well on its way to being carbon neutral by 2050. On a more immediate, local level, HS2 will contribute to less pervasive traffic, quieter rush hour services, and safer roads.
Although there are no direct studies linking an increase in property prices with the viability of clean air, there have been some suggestions that properties with enough distance from busy roads and air and noise pollution are more likely to sell for a higher price on the open market. The same can be seen in high-rise apartment buildings, with apartments further from street level not only providing better views, but putting distance between residents and the noise pollution of the streets below. It is therefore plausible that HS2’s positive impact on the environment – namely its ability to produce a better alternative to travelling by car, thereby keeping local roads less busy – will result in an increase in property prices.
By providing quick and sustainable links across the country, properties near HS2 stations will become prime real estate for commuters and those requiring extensive travel for work. Regardless of where you work, you will be able to access a broader range of prospective properties to live in thanks to lightning-fast rail travel from key cities. Journey times across the UK will be sliced to a mere fraction of what they currently are, putting key cities such as London and Birmingham within easy reach of one another. Although we have already established that this will do wonders for the UK job market, such connectivity bodes very well for tourism: it will be quicker than ever to hop from city-to-city on weekends and holidays, allowing people to experience more of their country, and boosting local economies significantly. With tourism being inextricably associated with property value according to the Office of National Statistics, we anticipate that this boost in British inter-city tourism will push property prices up even further.
With London being in easier reach than ever, those working in the capital can look at alternative towns and cities to live in, thus breaking the London Bubble of high house prices. Birmingham will become truly viable home bases for London workers. This is a particularly attractive prospect for those earning premium London wages, as these funds will allow them to buy much better value properties in cities away from the capital thanks to their relative affordability. As a result, we anticipate property prices across the country in key HS2 hubs to increase in value as people move out of London. This even bodes well for growing businesses, with the ease of commutability offered by HS2 making setting up businesses in cities other than London a much more feasible option – after all, rents and business rates away from the capital are much more conducive to better profits. In preparation for this, over 90,000 properties have been planned in-tandem with the construction of HS2 in anticipation of this population shift away from capital.
Although the first phase of the project is due for completion in 2029 at the absolute earliest, the future of HS2 is immensely bright and full of opportunity for communities across Britain. The road to a more sustainable, better-connected population lies just on the horizon, making investing in HS2’s key towns and cities a fantastic option for those looking to expand their property portfolio. Contact our team of experts below for more tailored advice on how to make the most of the opportunities offered by HS2:
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