The new 24-hour tube service in the capital launched this past Friday (19th August). Experts are predicting that the changes could have a positive impact on rental yields for buy-to-let investors in areas subjected to the changes.
Core underground lines will include: Central and Victoria, Piccadilly, Jubilee and Northern. This will not only help to improve the London night time economy but also support it too.
The service will help to create new opportunities, providing around 2,000 permanent jobs and boosting London’s economy by £360 million.
Leisure users such as clubbers or night time workers who perhaps live out of Central London will be able to travel home more easily. For those wishing to enjoy all London has to offer, or working long or irregular hours, the pressure to live close to the centre is being eased, particularly if that is one of the reasons for renting or owning a property in these more expensive areas.
Outer London, zones 3-5 to be precise, will now be serviced by trains 24/7, and areas on the Jubilee, Victoria and Piccadilly line will also benefit as the areas at the end of these lines will become more accessible.
This change helps ease the pressure on buyers because Central London house prices can be up to and in excess of £1,000 per square foot and in reality prices in zone 1 can be at circa £1,500 per square foot.
However, zones 3 to 5 will have a top rate price of £1,000 but in most instances it will be £400 to £700 per square foot, which is a massive 40% to 60% less than Central London Prices.
25% of ARLA members in London and the South East have said they expect to see rent increases around the tube stations connected with the 24 hour service.
Reacting to the move, the Association of Residential Letting Agents (ARLA) said that the new service could provide many people with the confidence to move further out of London. As such, the rental market could receive a timely boost.
Since Crossrail was announced in 2014, Slough and Reading have seen house prices increase by 39% and 33% when compared to a regional average of 22%.
“It will mean less time spent on late night buses for those living in Epping or Walthamstow, and will make the prospect of living further out of London more attractive –especially as rent costs continue to rise in the centre,” says Nik Madan, president of ARLA.
“Transport links are a major player in influencing demand, and in turn rent costs, so as end-of-the-line areas become better connected, there’s a chance we’ll see prices rise,” he added.
With future investment planned for the London Underground – particularly to increase the expansion of lines such as Circle, District, Hammersmith & City and Metropolitan –it will be interesting to keep a close eye on the trends that follow and whether buyers will be able to seize a temporary advantage in the London market.