24-hour trains will increase demand from buyers and renters
After several rounds of strikes by tube drivers, stalled conciliatory talks, and finally an acceptance of a deal by the RMT, the night tube is finally due to start running at the end of August this year.
In a phased introduction, it’s not going to be all in, all at once as Boris Johnson had wanted and the limited operations are a year later than planned. As the service picks up pace and extends further through to a more comprehensive coverage in 2017, and then to the Docklands Light Railway by 2021, London property prices are set to get another boost, and buy-to-let investors could see their rental returns pop.
Where will the night tube be operating?
To start with, 24-hour services will be introduced on the Central and Victoria lines, and run on Saturday and Friday nights. This will fan out to cover the Jubilee, Northern, and Piccadilly lines. Eventually we should see night tube services extended to the Metropolitan, Circle, District, and Hammersmith & City lines. The cost is going to be capped at standard off-peak fares, with daily travel cards valid through to 4:30am the following day.
The night tube is going to be a real positive for residents and users of night-time public transport, and will have a significant knock-on effect for buy-to-let investors. Night buses are generally overcrowded − the night tube will not only relieve this pressure, but also offer travellers a faster and more reliable route home.
The night tube brings London’s top entertainment spots closer: no more rushing from a show to avoid missing the last tube home. A late night dinner and goodnight drink doesn’t have to be hurried. Great news for young professionals who want to take full advantage of London’s night life. A bonus, too, for those working in the city, and those buy-to-let investors who own property near night tube stations.
Better transport commutes into higher London property prices
We’ve already seen what effect better transportation, and in particular, better rail access has on London property prices. Crossrail took previously languid property markets into hotspot territory with a wealth of investment opportunities. Similar growth of London property prices is beginning to be seen along the route of Crossrail 2: the mere mention of easier travel and reduced journey times has a positive effect on London property prices.
Research from dataloft and sellmyhome forecasts that London property prices within half a mile of night tube stations will rise by between 5% and 10% above the general rate of growth in the surrounding area. This forecast is in line with the valuation dynamics we’ve experienced because of Crossrail.
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The extra demand is also a boost to the property investment of buy-to-let investors. The millennial generation are proving to be renters, preferring to live for lifestyle rather than for long-term home ownership. Millennials forego early commitment to ownership in return for the flexibility that renting offers, and that flexibility includes living near transport routes that offer easy access to work and recreation. Properties nearer the night tube will also attract rental demand from students. This extra demand will translate into higher rental valuations and better investment opportunities.
For property investors wanting to benefit from the best potential for London property prices, the night tube is a huge clue to where price growth and rental demand may be highest.
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