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The Night Tube - How Will It Impact Property Prices & BTL?

August 24, 2016

London is officially the city that never sleeps, as its celebrated underground network has introduced its first ever Night Tube!

In the capital, people will pay a premium to live near great transport links, and as we’ve seen from Crossrail and Crossrail 2, they play a pivotal role in boosting house prices.

So what effect will the new Night Tube have on the London property market? We ask our resident property expert, Mark Lawrinson, some key questions…

Where is the Night Tube running?

The Central and Victoria lines opened 24-hours for the first time last weekend, and more than 100,000 passengers used the service in its first 48 hours. The service will be introduced on weekends on the Piccadilly, Jubilee and Northern lines in autumn.

Click on the image to enlarge the map.

Will the Night Tube drive up London house prices on the participating lines?

“Yes it will, but mainly in areas further out from central London, so Zone 3, 4 and 5 outwards. At the moment it’s too early to predict an overall price increase.

The Night Tube will appeal to young professionals who work and party in central London but can’t afford to buy in Zone 1 or 2. The new 24-hour service will mean they can push further out to more affordable areas, while still maintaining the lifestyle they want, and without spending a fortune on taxis!” says Mark Lawrinson.

Which stations are the ones to watch?

“When Crossrail plans were announced, there was a huge spike in demand from both tenants and homebuyers wanting to move into the chosen areas while prices were still affordable, and we expect a similar rate of demand for areas on the Night Tube when the service is fully rolled out.

Dataloft and Sellmyhome have recently forecasted that property prices within half a mile of Night Tube stations will increase by 5-10% above the general rate of growth in the nearby area. This is in line with the rate of growth we have seen in areas affected by Crossrail.

Most Londoners will have considered Zones 4 onwards out of reach, but the Night Tube has opened up new possibilities. We expect areas at the end of the lines to see the biggest property price rises, such as Cockfosters, High Barnet and Walthamstow,” Mark continues.

Leyton

The Central Line is one of the quickest lines, connecting the east to central London in a flash. It's this fantastic transport link, along with new infrastructure investment and regeneration, which has pushed house prices up in east London at a quicker rate than anywhere else in the capital. Now the Night Tube has arrived, we expect demand for hotspot areas such as Leyton to be ever stronger than it already is.

You’ll pay just £290,000 for a 1 bed in Leyton in Zone 3, and now the Central Line is operating 24-hours-a-day on weekends, easterly residents will have the luxury of being just 20 minutes away from the bright lights of the City.

High Road Leyton, E10 | 2 bedrooms, 1 bathroom | £440,000

High Barnet

Historically High Barnet has been seen as a residential, family area, but regeneration and the building of contemporary new builds has attracted a wave of young professional renters and homebuyers to this part of north London. The Night Tube will further increase the area’s popularity with a younger demographic.

Walthamstow

Salters Road, London, E17 | 2 bedrooms, 1 bathroom | OIEO £425,000

Thanks to redevelopment of the town centre, an influx of new shops, bars and restaurants, and a handy location of the edge off the Victoria line, Walthamstow has transformed from an undesirable and scruffy part of town into a hotspot for late twenty-somethings.

It has seen huge capital growth in recent years and is already a hotspot for first-time buyers and investors, but the Night Tube will only enhance this desirability.  Sean Hewitt, Manager of our Walthamstow branch, believes "smaller 1 or 2 bedroom properties will see the biggest increases, as these are the properties likely to be in demand by the demographic using the Night Tube."

Cockfosters

Cockfosters is an area that has experienced strong capital gain over the past year due to the fact it’s affordable, has a wealth of green spaces, instant access to the M25, and the Piccadilly line into London which connects to further good transport hubs; but it’s the Night Tube that will really put Cockfosters on the map.

Currently the area offers more houses than flats, and the greater proportion of new builds in the area are houses to accommodate this demand. The area draws in young professionals and young families who want affordable housing and schools, but who also yearn for central London at the weekends when they can get a babysitter - which is why the Night Tube will certainly increase demand for housing in the area.

Tottenham Hale

Currently, Tottenham Hale is one of the cheapest areas to buy property along the Night Tube route, with a one bedroom property standing at around £300,000. It’s already a first-time haven, but we expect demand to strengthen now that the area has access to a 24-hour Tube service.

What’s more, Crossrail is set to launch in Tottenham Hale in 2017, and it’s a proposed Crossrail 2 station, too. With infrastructure improvement comes regeneration, and regeneration pushes up property prices, so Tottenham Hale is certainly one to watch.

Investing along the route?

If you want to invest in a buy-to-let property along the line, Mark advises to “Look at the demographics of an area, and choose a location which is popular with young professionals or young families looking for larger properties within their budget, who also want the option of a central London evening lifestyle. Typically, it’s young professionals and families who want the best of both (i.e. affordable housing or rental prices and a central London lifestyle), so make sure you buy-to-let in an area that appeals to these demographics.

The migration of young professionals to outer zones will continue as the areas become more accessible, which will in turn spur regeneration and push up rental and property prices. In other words, investing in the right area could produce excellent rental yields and capital growth.”

Click here to see how to decorate your rental property according to tenant type.

Which areas on the edge of the Night Tube offer the highest yields?

Hounslow West** | Piccadilly Line | Zone 4 | Current highest yield: 5.3%*

Hainault | Central Line | Zone 4 | Current highest yield: 5.2%*

Stratford | Jubilee Line | Zone 3 | Current highest yield: 5%*

Tottenham Hale | Victoria Line | Zone 3 | Current highest yield: 4.8%*

Stanmore | Jubilee Line | Zone 3 | Current highest yield: 4.8%*

Walthamstow | Central | Victoria Line | Zone 3 | Current highest yield: 4.7%*

Cockfosters | Piccadilly Line | Zone 5 | Current highest yield: 4.4%*

Brixton | Victoria Line | Zone 2 | Current highest yield: 4%*

Morden | Northern Line | Zone 4 | Current highest yield: 4.4%*

Edgware | Northern Line | Zone 5 | Current highest yield: 4.1%*

High Barnet | Northern Line | Zone 5 | Current highest yield: 3.8%*

Ealing Broadway | Central Line | Zone 3 | Current highest yield: 3.7%*

*Rental yields quoted here are statistical assessments taken from our Interactive Yield Map on 23/08/16. They are not guaranteed and may be lower if the property does not achieve continuous occupancy.

**Unfortunately we don't have enough data to make a meaningful assessment about the yield in Heathrow, so we have found the yield for nearby Hounslow West instead.

If you’d like to buy or sell along the Night Tube route, or if you would like to let out your property, give us a call today on 020 7099 4000. Click here for an instant property valuation.


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