Arthur looks at the negative effects that the Southern Rail disruptions are having on property prices in commuter areas.
The general rule is that the better the transport links are in an area, the higher the property prices will be. That’s exactly why we see house prices soar in areas where new transport infrastructure projects are being implemented. Exhibit A: Crossrail. Exhibit B: the planned Crossrail 2. However, this rule also works inversely and there are growing fears that the continuous disruptions caused by Southern Rail are causing house prices to dip in the worst affected areas.
Southern Rail blames staff sickness, otherwise known as “unofficial strike action”, for ongoing interruptions to their regular services in recent months. During this week’s strike, however, over 300,000 passengers were caught in a dispute over the changing role of guards on Southern Rail trains. Passengers are becoming increasingly frustrated by their nightmarish journeys to work and employers are often left short-staffed in the mornings because of Southern Rail. Thankfully for commuters, industrial action has been called off on Thursday and Friday to allow for talks to resume.
Both the Prime Minister and the Transport Secretary condemn the RMT strike action and there have even been talks over the re-nationalisation of Southern Rail. The Mayor of London is keen to bring the GTR franchise under TFL control.
Reliability is key
The fact of the matter is that buyers want reliable transport networks. Considering the extent of the inconveniences caused by Southern Rail in recent months, it is unsurprising that London’s commuters are becoming increasingly reluctant to rely on Southern Rail.
It seems that buyers looking for homes within a “reasonable” commute time from the capital are less likely to choose areas serviced by Southern Rail because they want to guarantee the speed of their journey to work. Furthermore, commuters who are fed up with Southern Rail could be more likely to relocate to different parts of the country that boast more reliable transport links with London as well as cheaper house prices.
Brighton’s property market is likely to be the worst affected by the strikes, but evidence indicates that many other areas in the commuter belt will also be affected. Experts are suggesting that buyers may look as far as Warwick or Leamington Spa instead of the traditional commuter towns. This indicates that commuters no longer prioritise just the distance of the commute, but also the reliability of the train line providing that journey. The Warwick to London Marylebone route is operated by Chiltern Railways. It runs 36 trains per day and takes 1h24m on average.
Another option would be moving closer to central London. Since prices spike upon entering tube station territory, this choice would most likely to result in commuters opting for rental property over home ownership, forcing them to become part of the ever-growing Generation Rent.
Arthur plans to keep track of the correlation between Southern Rail disruptions and property prices over the coming months.