London Overground adds £80bn to house prices
The average price of a home close to an Overground line now stands at £580,000 compared to the London average of £440,000.
Johnny Morris, head of residential research at Hamptons International, said: “The introduction of the London Overground has had a significant effect on the housing markets it serves.
“Prices and activity have not only outperformed the local areas within which the stations sit but the wider London housing market too.
“While it is difficult to separate the impact of infrastructure upgrades from wider market forces, analysis shows that the introduction of the Overground may have added as much as £90,000 to the average price of a home within a 10 minute walk of stations.”
It is not just house prices that have experienced the Overground effect. Transaction levels of homes located close to the line have also proved resilient.
The research shows how during the downturn in 2008, housing markets close to Overground stations saw transaction levels fall back less and the market recover faster than other areas of the capital.
Today housing sales close to an Overground station are close to 90% off their peak of 2007, compared to 70% across the rest of London.
Morris added: “The improved services, stations and new links offered by the Overground made many areas, particularly in South and East London more attractive to both home owners and investors.
“In adding these stations to the tube map many areas that had been previously overlooked were brought to the forefront of house hunters’ minds. With more people in search of affordable housing moving out of the centre, the Overground has introduced new demand across its network.”
Unlike Crossrail, much of the line already existed. London Overground first came into being when TFL took over the Silverlink Metro in North London in 2007.
Initially the service was made up of just four lines running from Richmond to Stratford, Watford to Euston, Clapham to Willesden Junction and Gospel Oak to Barking.
TFL rebranded the lines to London Overground and in a significant move for the nearby
housing markets, added them to the tube map.
Over the next few years, stations and services were improved, new trains were commissioned and a new station built at Imperial Wharf. In 2010 the line was extended East, and the South section opened in 2012.
The research looked at the relative performance of the areas surrounding each station along the line and identified which had performed particularly well (see figure 2). Markets in Dalston Kingsland (31%),
Brockley (30%) and Hackney Central (29%) have seen some of the strongest price growth over the last 12 months.
Morris said: “The extensions of the lines to the East and South have in particular seen many relatively undervalued areas shift up the capital’s housing rankings.”
Looking ahead, further extensions to the network are planned for 2015. From next May routes will run between Liverpool Street and Enfield Town, Cheshunt and Chingford.
The Romford to Upminster line is also to join the network.
Morris concluded “The addition of the new lines to the Overground and tube map will undoubtedly have an effect on those local housing markets. We expect these areas will see sustained high levels of activity, increased investment flowing into the local housing stock and prices growing 3 per cent a year beyond those of the local area.”