Forthcoming Investment Opportunities
The present gloomy state of the property market is a good time to take stock and ponder how best to take advantage of the investment opportunities that will start to open up as the cycle bottoms-out before the next upswing.
Timing will be all, and we shall be discussing that in the future. But the other key question when it comes to property investment is of course location.
The most important factor in location is access. The most valuable land is where road and rail converges to form a transport node. The City of London is a perfect example showing how the benefits of a good natural location can confer advantages which can persist for hundreds of years. the city grew up on the nearest bit of dry ground at the lowest point on the River Thames which place where a bridge could be built. Roads converged towards the bridge from the Channel ports and ships loaded and unloaded their wares on wharves immediately downstream, whilst, from the hinterland of the country, roads came in from every direction and remain the conurbuation’s principal radial routes.
Kentish Rose
London’s continuing growth depends on a high-capacity fast rail system which allows people to live up to 100 miles away, the key factor being that people seem willing to make journeys of up to two hours each way, door-to-door between home and work. Fortunes have been made by canny investors who have purchased land and cashed in on its increased value when routes have been improved and new areas have become commuter territory. Perhaps surprisingly, there are still many railways that have not been electrified and services are slower and less frequent than they would be if the routes were modernised. Once modernisation takes place, it becomes practicable to commute from towns and villages along the route, and land values rise accordingly. The trick is to pick out the lines which are likely to be electrified or upgraded in the near future.
The most significant land value increases are likely to take place in connection with the high speed service between London St Pancras, Ashford and the Kent coast, set to be introduced in December 2009. Running over “High Speed 1” (the new name for the Channel Tunnel Rail Link) , the first major new railway to be built in the UK in over a century, it will provide a 109km (68 mile) high-speed link between St Pancras in London and the Channel Tunnel in Kent. New trains built by the Japanese firm Hitachi will be able to accelerate rapidly to 140mph, slashing the current journey times from Kent into London St Pancras. For example, London to Ashford will be reduced from 83 minutes to 36.5 minutes. The places that should benefit particularly include the run-down Thanet resorts of Margate, Broadstairs and Ramsgate, and above all, Folkestone (illustrated), which has also had the advantage of a major town centre and seafront regeneration project where the landscape design has been of exceptionally high quality. Smart purchasers have been buying into the area for some time and the best of the gains may already have been realised, but it is still worth checking out. Following the introduction of the high speed commuter service, the proposal to fill in the gap in electrification between Ashford and Hastings is likely to be implemented, which will make the attractive towns of Rye and Winchelsea realistic places for commuters to live.
Go West
Further into the future are other route improvements which will bring electrification and the accompanying increases in land value to the west of London. With the government’s new committment to a rolling programme of electrification, such schemes are likely to be happen sooner rather than later. The route from Paddington to Maidenhead and Reading is scheduled for electrification as part of Crossrail, and once the project is complete, the electrification team is likely to continue to Didcot, Oxford and Newbury. But be careful: train services beyond Reading are going to be disrupted for a while by the rebuilding of the junction just to the west of the station, where the lines towards Exeter and Bristol diverge.
Another route ripe for electrification upgrading is that which goes beyond Basingstoke towards Andover and Salisbury, which is an obvious destination point for electric services, whilst a fill-in scheme between Salisbury, Eastleigh and Southampton should bring Romsey onto the electrified network and enhance the attractiveness of Salisbury for commuters to London.
Buck-up
Although Buckinghamshire is one of the Home Counties, poor transport links have kept the northern part of the county sleepy and rural. This is set to change. A route which is not likely to be electrified for some time, but which is nevertheless likely to benefit from an upgrade, is that running from London through High Wycome towards Banbury and Birmingham, with its potential link to Oxford, giving an alternative service betwen the university city and London. A probable reopening, in the medium term is the line from Oxford to Bletchley, carrying a passenger service between Oxford and Milton Keynes and opening up commuting opportunities from the villages along the way.
Of course, at this stage it is not possible to say when these developments are likely to happen, but these are the priority routes for upgrades and improvements. Of course, to make the best of the investment opportunities, timing is critical; get in too soon and one’s money is tied up with nothing to show for it; too late and others will have taken the gains. Keeping an eye on the transport press is one way of finding out what is going on. A useful source of inside information is Rail Professional; current issues and back numbers can be downloaded free of charge from the internet.