The London rental market has witnessed a surge over the past year, with average rents rising by 12.5%. This uptick has been attributed to a variety of factors, but the most significant seems to be the pronounced shortage of available rental properties.
Interestingly, properties adjacent to the Crossrail line have outperformed the city’s average, boasting a 13.3% increase in average rents. Twyford, Woolwich, and Southall have been the frontrunners in this rental race, witnessing the steepest rent escalations.
Crossrail’s Impact on Journey Times
The introduction of the Crossrail has dramatically cut down travel times for many. For instance, Twyford residents can now reach Bond Street in a brisk 48 minutes, a reduction of 18 minutes from the previous average. While Twyford is an exception, showcasing a major time-saving difference compared to its western neighbours, the overarching trend is clear: Crossrail is a game-changer.
Woolwich, once one of London’s more isolated areas in terms of connectivity, now boasts a mere 15-minute journey to Liverpool Street. And if you’re heading to Whitechapel from Woolwich? You’ll be saving nearly 20 minutes off your commute. This enhanced connectivity has translated to a staggering 26.2% annual rental growth for Woolwich.
The Early Bird Gets the Worm
Meg Eglington, Senior Analyst at JLL, provides a revealing perspective on this trend. Even before the Crossrail stations opened their doors in May 2022, property prices saw considerable spikes during the planning and construction phases. Astute investors jumped the gun, hoping to capitalise on the anticipated price premiums. While much of the potential growth was factored into prices by completion time, the post-launch period saw rental values shoot up.
The reason? With the line operational, renters — who often don’t own property and thus don’t have a vested financial interest in price appreciation — are now more than willing to shell out extra for the sheer convenience of faster commutes.
Public Transport: A Top Priority for Tenants
JLL’s latest tenant survey reveals a compelling narrative: A whopping 92% of tenants consider proximity to public transport crucial, and two-thirds of them are ready to pay a premium for it.
Historically, North and West London have enjoyed better connectivity than the East. However, recent enhancements, particularly those from the Crossrail project, have significantly boosted East London’s appeal.
East London’s Youthful Demographics
Diving into renter demographics, the average London renter is aged 31. However, East London presents a youthful demographic with Tower Hamlets holding the record as the city’s youngest borough (median age of 30). Moreover, JLL’s letting data suggests that over 90% of East London renters are Millennials and Gen Z.
This youthful influx, coupled with improved transport links, implies that the demand for rental properties in East London, especially from young professionals, is set to soar.
The Future: Bright Prospects for Peripheral Locations
Looking ahead, areas near the line’s termini might catch the eye of first-time buyers. For those juggling affordability and desirable location, places slightly off central but offering swift commutes are emerging as appealing options.
In Conclusion
London’s property landscape is evolving, with the Crossrail project playing a pivotal role in reshaping investor perceptions and renter preferences. For potential property investors, understanding these shifting sands is crucial. As transport links improve and East London’s appeal grows, the ripple effects on property prices and rents will likely continue for years to come.