Helen Nugent

    House prices boosted by tram routes

    House prices boosted by tram routes
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    In the wake of Friday's international cyber attack, it was logical to assume that yesterday's complete shutdown of the Manchester tram system was another casualty of malicious ransomware.

    But bosses at Metrolink say the closure was due to a technical fault in the control network and has now been resolved. For a city that has come to rely on its trams, any glitch is incredibly disruptive, not least because the bus network - to the north of Manchester at least - is a shambles.

    However, when the Met is working, it's a convenient and efficient means of getting around, if a little pricey. And the multi-billion pound extension of what was once a straightforward replacement for outdated trains and tracks has had a beneficial impact on house prices.

    According to new research by Lloyds Bank, the average house price along the Greater Manchester tram routes increased by an average of 11 per cent (from £134,266 in 2013 to £149,511 in 2015) in the two years after many of the routes opened – almost double the 6 per cent increase recorded in the two years previously.

    In addition, since 1995, the average house price along the tram network has grown from £50,620 to £188,898 last year, an increase of 273 per cent. While this rise is marginally below the increase of 276 per cent for Manchester, houses along the tram network trade at a premium of £21,476 to the Manchester average (£188,898 compared to an average of £167,431 for Manchester).

    And what of house prices alongside other tram routes? Lloyds says that of the cities analysed in its survey, each of them has seen a trams-led premium in property values. In addition to Manchester, half of residential locations close to tram stops in Birmingham, Nottingham, London and Edinburgh have seen house prices grow faster than surrounding areas.

    In Nottingham, house prices in the area covered by Line 2 in the south of the city have soared by 40 per cent (from £115,050 to £160,674) compared to 31 per cent (from £137,804 to £180,102) in the surrounding areas since 2004. And in the two years after the Midland Metro opened in 1999 – which operates between Birmingham and Wolverhampton - the average house price in the areas served by the tram system grew from £42,253 to £52,720 in 2001, representing an increase of 25 per cent.

    Meanwhile, since opening in 2014, the average house price on the Edinburgh Trams route has grown from £199,171 to £218,350, an increase of 10 per cent. Furthermore, house prices near future Crossrail stations have already seen an average increase of 22 per cent over the past two years in anticipation of the new line, from £344,242 in 2014 to £420,798 in 2016, compared to an average 14 per cent growth for surrounding local authority areas and a 13 per cent rise for Greater London.

    Andrew Mason, Lloyds Bank mortgage products director, said: 'A new and modern transport system is potentially a great catalyst to urban regeneration and can be a game changer for cities investing in improved links. An excellent tram system can stimulate inward investment for the local economy, unlock previously hard to reach sites for development and make it easier for people to move around the city.

    'These are important factors for the housing market, and we can see these routes have helped boost increases in property values. Many properties close to tram links have recorded an outperformance in house price growth compared to the city as whole. Having a tram stop on your doorstep can make a lot of difference.'

    I echo Mason's thoughts - but only when the trams are actually working.

    Helen Nugent is Online Money Editor of The Spectator