Friday, January 23, 2009

Rising Values Near Transit in UK

There is an article in the Times of London on whether purchasing a home near transit is a worthwhile investment. In London people are willing to pay a premium to be near a tube stop and values around areas that will soon be stations are rising quickly.
The extension of the former East London Tube Line will run from West Croydon and Crystal Palace to Dalston Junction, and will connect with the Tube network at Whitechapel. A second phase, due to open in 2011, will continue the line through Canonbury to Highbury & Islington Tube station. The average house price has already risen from £187,800 in 2001 to £317,959 in 2007, according to Hometrack, and gentrification has arrived in the form of the Dalston Culture House and the relocation of the Vortex jazz club to new premises, as well as several new restaurants.
A 2005 report by the Passenger Transport Executive Group found that all UK tram schemes have led to increases in commercial and residential property values, in some cases by 15 per cent. Rental prices have risen by 7 percent.
What is most interesting though is something we never think of here in the United States. The warnings to some are that retailers won't be around until closer to the time that the new station opens.
But buyers must be prepared to wait. “The change will not be instantaneous. Some people who would never have considered living in an area without a Tube line will come immediately. Others will wait for the retail and restaurants.” Scotford urges buyers to be aware that retailers may not arrive immediately to the area because current leases will take a while to expire. But it should not take too long.
The fact that they expect retail that is within walking distance is a little bit different. Here there are a whole heap of issues surrounding the type of retail and whether there will be enough parking because around the station extensions, there is generally not enough density to support such retail without parking or other help from cities, but there it's expected. Kind of an upsetting commentary if you ask me.

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