November 9th, 2016.
The New Heathrow and Local Investments: Is Now the Time to Develop?
Earlier this month it was revealed that Heathrow Airport has been given the go ahead to propose the build of its third runway, with plans for planes to take off from a ‘ramp’ over the M25 motorway. But what do these plans mean for investors and landlords in the surrounding area?
Third Runway Given Go Ahead: The Final Decision
According to The Department for Transport, the new addition could bring economic benefits of up to £61billion and will create 77,000 additional local jobs over the next decade and a half.
A public consultation will be now held to discuss the effects the expansion could have and MPs will vote on the issue in the winter of 2017-2018. The runway is unlikely to become operational until 2025.
How Has the Announcement Affected Property Prices?
According to a report by Countrywide, many home owners will be given a 25% compensation payment should the new Heathrow Airport plans get the go ahead. This means homeowners will be given the opportunity to sell their properties to the airport for 25% more than it is worth, with stamp duty, legal fees and removal costs also paid.
However, despite this, homes in these areas have long lagged behind in value when compared to the rest of London. Currently the average property here is worth £260,000 and even with the 25% will be considerably cheaper than properties nearer the city centre.
Fionnuala Earley, Countrywide’s Chief Economist, has said:
“Twelve years ago homeowners around Heathrow moved on average every 14 years, while today the figure is 21 years, the longest on record. Homeowners who have sold, have done so against a backdrop of uncertainty, without any compensation,”
Experts have reported that those who do not decide to sell could expect to see up to a 20% fall in value due to the noise and air pollution it may bring.
Could This Be the Time to Invest?
Some experts are claiming, if you buy now with the development in mind, there could be bargains to be had. Lee Grandin, Owner of Lend2Landlord, has said:
“Yes, if you have a nice £3m mansion in Kew or Windsor an Airbus over your head every 10 seconds probably isn’t going to make your dream mansion desirable to purchasers.
“But flats and smaller houses will see a significant increase in demand from workers moving to the area for work.
“Any expansion of Heathrow would be good news for landlords who run their business in close proximity to the airport.”
This plan is also likely to be positive for local businesses, as an increased airport capacity means more and more people coming to the area who will need somewhere to stay overnight and enjoy a meal before taking to the skies.
Financing Your Very Own Heathrow Project
It may be years off, but if you are planning to invest in the area around Heathrow and the M25, whether this is to become a buy-to-let landlord or develop a property for sale, we can help. Learn more about development finance and buy-to-let mortgages by calling us on 02920 766 565.