The 'HS2 Effect' on property prices: Will you benefit?
Curious how HS2 will impact property prices? And, is HS2 something you should consider when selling a home? Good question…
When the Labour government announced plans for HS2, the most expensive high-speed railway in the world, back in 2009, the project was met with a mixed response.
It had environmentalists playing the sustainability card, us (the general public) unsure how it'd affect our everyday lives and critics frantically questioning all £56.6 billion of the HS2 budget. Quite rightly so, seen as though currently it’s estimated to have near-on doubled, with the estimate now at £106 billion and that’s before work has even started!
So as you can imagine, with such a controversial project comes a wave of critical backlash. Sites like STOP HS2 have been formed to ‘expose’ the project, and even as we write this blog, there's a HS2 protestor on hunger strike at the top of a 150ft crane in a desperate attempt to prevent the works going ahead.
A clear sign of just how BIG the impact of HS2 is expected to be.
And as we all know, a consequence of BIG national change (Brexit, COVID-19, HS2) can often be BIG fluctuations in the UK housing market, so to ensure you invest your money in the right place at the right time, here's an insight into our prediction of the so called ‘HS2 Effect’ on property prices.
What is HS2? A brief summary
To fully understand the ‘HS2 Effect’ on house prices you first need to know what HS2 is.
HS2 stands for High Speed Two as it’s the second high speed railway to be built in the UK. The first, High Speed One, connects London to the Channel tunnel – a build much smaller in scale, with just 67 miles of track.
When it’s fully operational, HS2 will connect 8 out of the UK’s 10 major cities in a bid to bridge the north-south divide (no easy task) while boosting the economies of cities in the Midlands and up North. The largest cities on the list are Birmingham, Manchester and Leeds.
All sounds great, but to give you a better idea of what the HS2 will look like when it’s complete in 2033 (the current ETA), we’ve pulled together a few key stats on the build and a map of the route below...
The project is expected to require 30,000 workers.
The track will stretch for 343 miles and include 45 miles of tunnels, 37 miles of viaducts, 119 miles of cuttings and 120 miles of embankment.
HS2 will serve over 25 stations which will connect close to 30 million people!
The line will also serve stations in Scotland and function as part of its existing rail network.
The first trains are expected to be running in 2026 (In-between London & Birmingham).
HS2 is part of the Britain’s goal to be net Zero (carbon) by 2050.
In 2010 the HS2 had an ETA of 2031. Since then it’s been pushed back to 2033.
Get a better idea of the route with the HS2 map below...
The phases of HS2 construction
As you can imagine, with it being such a large-scale build, the construction of HS2 has been divided into two phases and could possibly be extended to a third and maybe even a fourth phase as the build progresses. So to help you determine the future 'HS2 Effect on property prices, here's an overview of the Phases planned so far...
HS2 Phase One (London – Birmingham)
Phase 1 of HS2 will serve four stations. Starting at London Euston the line will stop off at Old Oak Common before making the journey to Birmingham Interchange (in Solihull) and terminating at Birmingham Curzon Street. The line will stretch for approximately 140 miles – a journey that will take just 49 minutes!
Phase One of the track will consist of over 32 miles of tunnels and more than 10 miles of viaducts. HS2 Phase One will also include a high speed link for west coast main line. This section of the line is predicted to cost in the region of £35 billion - £45 billion and is due for completion in 2029.
Learn about Phase One in greater detail below...
HS2 Phase 2A (Fradley - Crewe)
This, the western branch of the HS2 line connects the West Midlands with Cheshire. At Crewe, HS2 will connect with existing high speed services to ferry passengers between Crewe and London.
Phase 2A will take the high speed line northwest and provide particular benefits to Crewe, which include an upgraded station designed to cope with high speed trains; HS2 will pass underneath the existing station via a high speed tunnel, so it can remain on high speed tracks.
FUN FACT: Where the standard train tracks differ from high speed tracks is mainly the geometry. You can expect far less sharp, and in many cases, banked corners on a high speed track, to reduce the loss of speed. The tracks are also made of stronger material to withstand the higher levels of force.
HS2 Phase 2B (Crewe – Manchester + Birmingham - Leeds)
Phase 2B forms the majority of the Y shaped line and is split into two legs. The western leg will extend services from Crewe onto Manchester, with a line extending to Manchester Piccadilly station. A branch of HS2 at High Legh will also take trains 25 miles on conventional track into Liverpool, as well as other nearby locations like Preston and Wigan.
The eastern leg will connect the West Midlands with Leeds. On its way HS2 will pass through the East Midlands, serving places such as Nottingham, Derby and Leicester and continue North via both Sheffield and Wakefield. Services on the eastern leg are also predicted to improve the efficiency of services north of Leeds, in places such as York and even in parts of Scotland.
Other possible phases for HS2
While these future phases will likely depend on the success of the existing HS2 network, it’s worth baring them in mind. These are predicted to vary across the two legs.
For the western leg this would be to build a high speed line to Liverpool – the city was deprived of a HS2 track despite Liverpool City Council offering a whopping £2 billion to get the city connected!
And in the case of the eastern leg, this would involve extending the line north of Leeds to Newcastle which would also see HS2 bypass York. There’s also talk that the line could be extended even further into parts of Scotland to connect cities such as Edinburgh and Glasgow.
So, what are the benefits of HS2?
When looking to determine the ‘HS2 Effect’ on property prices, being aware of the benefits that come with HS2 can be incredibly beneficial. Here’s 4 for you to consider, plus how they could affect your house price…
HS2 = Cleaner Air
When buying a property, air quality should be high up on your tick list – in fact, it’s the reason why many of us point blank refuse to live in cities. So, if the air in cities was cleaner, it could increase our pool of potential buyers and in theory our property’s value, right?
Yes, in some instances, which is why HS2 should come as a great asset to cities across the UK, providing the government stick to their pledge to make the line carbon zero.
The entire HS2 project has been specially designed with the environment in mind, however the most obvious sign of this is the train itself, which unlike the majority of trains on UK tracks, will be powered by electricity, not diesel. The plans also suggest that HS2 locomotives should use less energy than the average high speed train. But that’s not to say the green thinking stops there.
Even the electricity used to power HS2 trains will be sourced from a highly efficient power grid, that harvests a large amount of its energy using solar and wind power. In the future, the government hopes to make this energy fully zero carbon, which would make all travel via HS2 carbon zero.
In its early years, the line is still predicted to produce 17 times less carbon than the equivalent flight or 7 times less carbon than the equivalent car journey. A pretty impressive achievement if you ask us and nevertheless something that could encourage more buyers to favour a life in the city.
HS2 gives cities greater connectivity
It’s no secret that a property’s location can largely determine its value. The more conveniently located a property is, typically the larger price you can demand.
Hence why properties that are located in the city centre typically demand a higher price tag. As you can imagine, if HS2 significantly reduces the typical journey time, it could significantly increase distance that people can comfortably live from their place of work.
Something that we predict could lead to a noticeable ‘HS2 Effect’ on house prices, particularly in the north as commuters move further afield.
FYI: We’re not just basing this on our own property knowledge. Local economic plans that have been developed in line with HS2, are expecting over 90,000 new homes to be built and half a million jobs to be formed in response.
But it’s not just for commuters that the connectivity of HS2 is a major perk. Local economies are also expected to see substantial growth as a result of the high speed line, as it makes investment further afield a more viable option.
For instance, a long-term impact of the project could be companies relocating their operations from business hubs like London to the West Midlands or parts of Yorkshire, to take advantage of reduced rents and business rates.
Business aside, this greater connectivity is also expected to increase levels of tourism up north, by giving tourists greater reasons to venture outside of London. Great news for local businesses, public services and tourist organisations.
HS2 means less congestion (both on rail and road)
No one wants to live somewhere that’s congested, where a trip to shops that would takes just five minutes by foot, takes half an hour by car – yet another reason why we expect to see a ‘HS2 Effect’ on house prices.
By running on its own set of high speed tracks, HS2 will free up a lot of space on existing tracks, meaning that not only can it free up space for additional local services at peak time, but also encourage a large majority of freight to turn to rail.
A move that is likely to pull a lot of lorries off our roads and reduce the time of the average commute.
FUN FACT: Did you know that by allowing more room for local services, HS2 will benefit over 100 stations that aren't even on its route!
HS2 is environmentally viable
A major issue with the majority of railways in the UK is the environment. Their operation and how their route is landscaped often comes at the expense of the environment, plus the majority are incredibly noisy.
As a consequence living near a railway can often be perceived as a large negative and in many instances affect your property’s value. However, with HS2 it could become far less of a niggle.
HS2 has been labelled the UK’s largest environmental project and it’s easy to see why.
Long sections of the track will be set in cuttings or tunnels to buffer the noise and reduce the line’s impacts on the surrounding landscape.
The build also incorporates areas of grassland to support an array of reptiles such as badgers, birds and even bats. Ponds and larger bodies of water will also be factored into the landscape to ensure the insect population remains healthy. Find out some eco-facts about the build below…
There will be 15 green bridges (grassed bridges planted with shrubs) to allow animals to cross safely.
They’ll also be an array of underpasses designed to assist animals such as moles.
7 million trees and shrubs will be planted along the route.
33 square km of new woodland will be created for wildlife – that’s 30% more than what’s there now!
But, are there any drawbacks to HS2
As with anything, with the good comes the bad. Scour the internet and it won't be long before you come across a roster of drawbacks to the build, plus some strong opinionated rants centred around HS2, so we won’t bore you by going through them all. Here’s what we think are the four main drawbacks of HS2…
As with the majority of nationwide transport projects, HS2 isn’t cheap. The HS2 budget has practically doubled since it was first announced (now estimated at £106 billion).
It’s hard to comprehend how the government could be £50 billion off budget, we know, but now that work has officially begun on Phase 1 of the build, we think it’s highly likely this figure continue to increase.
As anyone who’s ever built a house will know, the chance that you don’t incur any unexpected costs along the way is incredibly slim, especially when the project is umpteen times bigger in the case of HS2.
Ask us and a consequence of this could be high ticket prices, which we fear would shy both commuters and tourists away from travelling on HS2.
Either that or taxes will rise to compensate. It’s worth noting that both these outcomes could determine the ‘HS2 Effect’ on property prices.
Is HS2 really that necessary?
You could also argue whether HS2 is necessary while in the UK the coronavirus epidemic is still a significant issue.
Currently, there’s a strong case for HS2 to be postponed and for some of the funds to be donated to the NHS. But seen as though work on HS2 has already commenced, we feel this is unlikely to go ahead.
Houses have been demolished because of HS2
And yes, while the future ‘HS2 Effect’ on house prices could prove to be good, particularly for those in cities, the immediate effect on housing was anything but, as those who lived on the route were forced to sell their homes to HS2 and move elsewhere.
These included the well-known comedian, John Bishop, who sold HS2 his Cheshire mansion, Whatcroft Hall, for £6.8 million!
The company bought a whopping 902 properties, farms or pieces of land between 2011 and 2018 at the cost of roughly £600 million – this included an entire new build estate in Mexborough, South Yorkshire, that had only just been built in 2016.
HS2 could be made redundant now that more people are working from home
Ever since the coronavirus forced the UK into Lockdown, working from home has become not only a more viable option, but also a more popular choice amongst Britain’s workforce.
A social change that has significantly reduced the strains on public transport across the UK. For instance, at the time of writing this blog, a common trend amongst Londoners is moving out of the city to buy in more rural locations – a popular hot spot for which is Wales.
Discover why this is in our in-depth article here.
And this brings us onto the real question, what we think could largely determine the ‘HS2 Effect’ on house prices. Will the popularity of working from home be a permanent long-term change or just a temporary fad? In the event this trend becomes both a permanent and popular change for employees, you could argue that the HS2 project, is highly unnecessary and that in the long-term will not be used to a large enough extent to warrant the cost.
So baring all this in mind, what do we think will be the 'HS2 Effect' on property prices?
Well.. Considering that the project is still some years away the definite ‘HS2 Effect’ on house prices is unknown, but if you ask us whether you benefit from this or not, will largely depend on your property’s location.
Properties not within walking distance of a HS2 station will likely experience very little or no effect whatsoever on their value – although those close to the line may see their values drop during the construction phase due to the added disruption and noise etc.
However, once the various phases of HS2 are up and running (so as of now 2029 onwards), we predict that properties located close to a HS2 station could see their values spike significantly.
And we’re not on our own on thinking this – The Guardian has commented that properties with a 15 minute walk or less from a HS2 station could see a spike in value of between 30% and 60%!
Of course this will depend on the success of HS2. So, if ticket prices are high and few commuters actually make use of it because they’re either working from home or using existing services, the likelihood of such an increase will be far less.
But, in the event that HS2 is received well by the public and proves to be a wise investment, then purchasing properties that are central and close to a HS2 link could prove to be an lucrative investment, be they to live in or rent out to commuters.
FYI: With many actually looking to move outside the city due to the COVID 19 epidemic, now may also be a good time to buy while these sellers are motivated.
But if you ask us, the main effects of HS2 on house prices at the moment are likely to be negative (don't shoot the messenger!) and the benefits aren't something that we shall see until at least until Phase One is complete (London - Birmingham).
So while that means we wouldn't advise you go out and buy and inner city property just yet, what it does mean is that if you live in close proximity of where the HS2 line is planned, then selling up may be a wise idea, before the construction noise deters any, if not all your potential buyers.
And you see the great thing is, being a leading property solutions company that will buy ANY property that's in ANY condition and ANY location, we can help you get a cash sale and, if needs be, complete in as little as 7 days - regardless of any HS2 disturbance! Sound like a good strategy to avoid the negative 'HS2 Effect' on property prices? Reach out to one of our team today.