HIGH SPEED 2 BLIGHT STUDY - WhatDoTheyKnow

HIGH SPEED 2 – BLIGHT STUDY

December 2010

CONTENTS 1. Executive Summary ................................................................... 4

2. Introduction .............................................................................. 6

3. The impact of the proposed route on property values ............... 8

4. The impact of the proposed route on sales volumes ................ 14

5. The impact on urban and rural areas ..................................... 19

6. The impact around tunnel portals ........................................... 23

7. Conclusion .............................................................................. 30

APPENDICES

A. Appendix 1 - Methodology...................................................... 34

B. Appendix 2 – The Route .......................................................... 35

C. Appendix 3 - Tunnels .............................................................. 37

D. Appendix 4 – Analysis Zones .................................................. 39

E. Appendix 5 - Data .................................................................. 43

F. Appendix 6 – Glossary of Terms .............................................. 44

G. Appendix 7 – National and Regional analysis ......................... 45

H. Appendix 8 – Study Limitations ............................................... 50

1

Executive Summary

CB RICHARD ELLIS | HIGH SPEED 2 – BLIGHT STUDY

Executive Summary

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High Speed 2 Ltd commissioned CB Richard Ellis to examine whether the announcement of

the HS2 route in March 2010 impacted on local housing market activity. To this end we

compared residential property transaction levels and values in the six months before and

after the announcement. We studied areas next to the line (Zone A) and compared these

changes with those further away from the line (Zone B). We also considered activity in areas

far enough away to be unaffected by way of a control sample (Zone C).

1. Our research found that the housing markets in areas next to the proposed route

have weakened since the announcement. Generally we found that in these areas

house prices and sales volumes have fallen since the announcement.

2. Further away from the line values and volumes either rose or fell to a lesser extent.

The two charts below show price and activity falls in Zone A, which is the analysis

area nearest to the route. There were increases further away.

3. Prices and volumes had weakened more in rural areas than urban areas. Values

and sales volumes fell in the rural areas, but increased in the more densely

populated areas. There is likely to be existing noise blight from other infrastructure

in urban areas which has been built into pricing levels.

4. Areas immediately around tunnel portals saw a negative change on prices and

volumes where the tunnelled line emerges into an overland section. Conversely we

identified a positive change on the other side where the line is underground.

While this study does not account for other factors affecting housing markets along the

route, the consistency of the results point to a relationship between proximity to the route

and weaker values and transaction levels following the announcement. It is possible that

specific factors like new residential development, investment in other transport infrastructure

and the growth of employment centres may have lifted sales volumes and prices, or vice

versa. However, it is beyond the scope of this research to look into these. The only exception

is urban and rural markets which we considered separately on the request of HS2 Ltd. More

detailed and area specific analysis could form the basis of future research.

Executive Summary

Figure 1. Changes in values

following the announcement of

the proposed route

Figure 2. Changes in sales volumes

following the announcement of the

proposed route

(2)%

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Source for both charts: Land Registry; CB Richard Ellis Research


Executive Summary

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2

Introduction


Introduction

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INTR

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INTRODUCTION

Background

High Speed Two Limited (HS2 Ltd) was set up by the Government to consider the case for

new high speed rail services in the UK. Created in January 2009, it examines the case for

rail services linking London, northern England and Scotland. It also specifically considers

the feasibility of, and business case for, a new high speed rail line between London and the

West Midlands, the subject of this paper.

HS2 delivered a report to Ministers at the end of 2009, published in March 2010, alongside

the previous Government‟s Command Paper on high speed rail. In light of HS2 Ltd‟s new

remit of 11 June 2010, the coalition Government asked HS2 Ltd to carry out further work

on a Heathrow connection, along with a report on the comparative case for different ways

of connecting the West-Midlands, Manchester and Leeds. This work will inform the

Government‟s overall strategy and timetable for establishing a high speed rail network.

HS2 Ltd has been asked by the Government to plan a public consultation for early 2011.

This will represent an opportunity for those with an interest to find out more about the

proposals and to put forward their views.

In March 2010, it was proposed that the second high speed rail service would run from

London Euston, mainly in tunnel, to an interchange with Crossrail, west of Paddington, past

West Ruislip alongside the Chiltern Main Line, to Amersham then on to Aylesbury. After

Aylsebury, the line would run alongside the Aylesbury to Verney Junction line, joining it

north of Quainton road and then broadly following the direction of the dismantled Great

Central Main Line. Beyond Brackley, the route strikes out to the north-west across open

countryside. See maps 7 and 8 in appendix 4 for more information.

With this announcement some home owners discovered the possibility of having their

property blighted, with some media commentary suggesting that houses within 500 meters

of the track may lose as much as 20% on the asking price. The debate on the effect of HS2

on house prices near the route is ongoing.

The purpose of this report and our approach

This report provides independent analysis to reveal the facts and examine whether the

housing market around the proposed route has been affected since the announcements of

the route. To this end we compared residential property transaction levels and values before

and after the announcement in areas immediately around the proposed route (Zone A). We

compared areas immediately around the route with areas further away (Zones B and C).

For more information please see Appendix 1 – Methodology.

The report is structured:

The report first considers changes in values along the whole route of HS2 excluding

the two areas where the line runs into a tunnel (see Appendix 3 – Tunnels). It

compares areas close to the line with those further away so we can see if the line

has affected prices nearby. It then does the same for sales volumes.

Next, we undertake the same analysis, but this time separate areas between urban

and rural.

The final analysis looks at how areas immediately around the tunnel exits have

been affected.

Introduction


Introduction

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3

The impact of the proposed route on

sales values


The impact of the proposed route on property values

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In this section, we examine how property values have changed following the announcement

of HS2. We first consider the affect on all property types combined and then disaggregate

to the individual property types; flats, detached etc. We compare areas, on the over-

ground section of the route, close to the line – Zone A – with areas further away - Zone B

and C. For more information please see Appendix 1 – Methodology.

THE IMPACT ON ALL TYPES OF PROPERTY

Our first analysis considered the difference between prices prior to and post the

route announcement for all properties along the whole route, except where the line

runs in a tunnel.

We observed prices in Zone A, nearest to the route had fallen by 1.3% compared

with a rise of 3.7% in Zone B and a 7.2% rise in Zone C (See Fig. 1).

Given that prices have weakened near to the route, but not further away it suggests

that HS2 has had a detrimental effect on prices, all other things being equal.

Figure 1. Values in Period 1 and Period 2 - All properties (overground)

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Period 1 (RHS) Period 2 (RHS) Difference (LHS)


Source: Land Registry; CB Richard Ellis Research



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THE IMPACT ON DIFFERENT TYPES OF PROPERTY

Flats

This analysis considers the difference in prices before and after the announcement

just for flats in all areas except tunnels.

Prices for flats in Zone A have fallen by 2.2% following the announcement

compared with a rise of 10.2% and 6.1% in Zones B and C respectively (see Fig. 2).

This means, as with all property types taken together, prices have weakened near

to the route but not further away. Unlike the previous analysis the increase has

been greater in Zone B than Zone C. We conclude that HS2 has had a detrimental

effect on prices of flats, all other things being equal.

Figure 2. Values in Period 1 and Period 2 - Flats

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Terraced Houses

This analysis considers the difference in prices before and after the announcement

for terraced housing in all areas except tunnels.

Terraces have seen their prices rise by 1% in Zone A. However Zones B and C have

seen a greater rise, 3.3% and 2.5% respectively (see figure 3).

Although prices have not fallen, they have risen by a lesser extent, suggesting a

negative impact from HS2 all other things being equal.

Figure 3. Values in Period 1 and Period 2 - Terraced (excluding tunnels)

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Semi-detached houses

The difference in price levels before and after the announcement for semi-detached

in all over-ground areas.

All prices have risen, but prices in Zone A rose by the least. Prices in Zone A have

risen by 1.4%, compared with a rise of 5.4% and 5.9% in Zones B and C

respectively (see figure 4).

Again the prices of semi-detached properties near HS2 have been negatively

impacted all other things being equal.

Figure 4. Values in Period 1 and Period 2 – Semi-detached (excluding

tunnels)

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Detached houses

The same analysis is undertaken here, but for detached properties.

Prices of detached houses in Zone A have fallen by 1.8% compared with a fall of

0.2% in zone B and a 2.3% rise in Zone C (see figure 5).

This suggests prices of detached properties have weakened near to the route, but

not to the same extent further away. On this basis HS2 has had a detrimental effect

on prices, all other things being equal.

Figure 5. Values in Period 1 and Period 2 – Detached (excluding tunnels)

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3

The impact of the proposed route on

sales volumes


The impact of the proposed route on sales volumes

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SALE

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In this section we identify whether property transaction levels have been affected by the

announcement of HS2. Again we focus first on the overall market and then disaggregate

out to individual property types.

THE IMPACT ON ALL TYPES OF PROPERTY

This analysis considered the difference in sales volumes before and after the

announcement for all properties in all over-ground areas.

Volumes in Zone A fell by 4.5% compared with a rise of 8.4% in zone B and 3% in

Zone C.

The sample behind this percentage change figure is 6,585 sales in Zone A 13,285

in Zone B and 17,161 in Zone C (see figure 6).

As sales volumes has weakened near to the route, but not further away, we

conclude HS2 has had a detrimental effect on sales volumes, all other things being

equal.

Figure 6. Sales in Period 1 vs Period 2 - All properties (overground)

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THE IMPACT ON DIFFERENT TYPES OF PROPERTY

Flats


announcement for flats in all areas except tunnels.

Sales volumes in Zone A have fallen by 25.0% compared with a fall of 2.1% in

zone B and a 0.8% rise in Zone C (see figure 7).

These figures are derived from 1,319 sales in Zone A 2,925, in Zone B and in

Zone C 3,195.

This suggests - very strongly - that sales volumes of flats have suffered in areas

close to the HS2 route, all other things being equal.

Figure 7. Sales in Period 1 and Period 2 - Flats (excluding tunnels)

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Terraced housing


announcement for terraced houses in all over-ground areas.

Sales volumes of terraces in all areas saw volumes fall in Zone A by 5.1%, while

volumes in Zone B rose 7.3% and fell by 2.7% in Zone C (see figure 8).

These figures are derived from 1581 sales in Zone A 3472, in Zone B and in Zone

C 4535.

Although sales of terraces fell in the area immediately around the HS2 route (Zone

A) and rose in Zone B, the results are less conclusive, because sales also fell in

Zone C. The weakening in Zone C suggests factors other than HS2 may also be

influencing volumes.

Figure 8. Sales in Period 1 and Period 2 - Terraced (over-ground)

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Semi-detached houses

Sales volumes for semi-detached properties in Zone A rose by 4.2% over the two

time periods. This compares with rises of 11.4% and 6.5% for Zones B and C

respectively.

These figures are derived from 1,973 sales in Zone A 3,926 in Zone B and in Zone

C 5,546.

Sales of semi-detached houses rose in all zones. However, the rise was less

significant nearer to the proposed route, suggesting a degree of adverse impact

[from HS2], but does not directly show evidence of blight.

Figure 9. Sales in Period 1 and Period 2 – Semi-detached (excluding tunnels)

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Detached houses

Volumes of detached houses in all areas excluding tunnels rose by 6.3% in Zone A.

This compares with a rise of 17.2% in zone B and a 6.9% rise in Zone C.

These figures are derived from 1,712 sales in Zone A 2,962 in Zone B and 3,885

in Zone C.

Sales of detached houses rose in all areas. The largest rise was in Zone B,

suggesting being close to the route could have negatively impacted on volumes but

does not directly show evidence of blight.

Figure 10. Sales in Period 1 and Period 2 – Detached (excluding tunnels)

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The impact on urban and rural areas

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THE IMPACT ON SALES VALUES

This next section focuses solely on the areas closest to the proposed route. Here, instead of

comparing Zone A with B and C, it compares changes in the housing market between

urban and rural areas. As with the previous section, we examine both prices and sales

volumes. Please see Map 9 in Appendix 4 for more detail on what areas this analysis

considers.

In rural areas of Zone A values have fallen 4.9% whereas in urban areas they have

risen 2.3% (see figure 11).

Our analysis suggests rural areas have been impacted proportionally more than

urban areas. Urban areas already suffer noise blight from other transport

infrastructure and this has been built into pricing levels; as a result further noise

blight is probably less relevant than in rural settlements.

Figure 11. Changes in values in rural and urban areas of Zone A - All

properties

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THE IMPACT ON SALES VOLUMES

In rural areas sales volumes have fallen 0.7%. In urban areas they have fallen 8%.

This suggests that sales in urban areas - other things being equal – have been hit

hardest by the route announcement.

This appears to contradict the previous findings, which suggest prices in rural areas

have reduced more. However, it probably suggests potential sellers / buyers in

urban areas have been dissuaded from moving, partly due to reduced prices, but

also until the route is confirmed or blight compensation confirmed.

Figure 12. Changes in sales volumes in rural and urban areas of Zone A -

All properties (excluding tunnels)

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The impact around tunnel portals

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THE IMPACT ON SALES VALUES

In this analysis we study sales values and volumes in areas immediately around areas the

tunnel entrances. We compared the areas where the line emerges with areas where the line

is underground. We first looked at all four portals together (two for each tunnel) and then

each in isolation. For more information on the exact location of these portals, please see

Maps 11 and 12 in Appendix 4.

The main conclusion is that values have weakened proportionally more where

trains would emerge from the tunnel. The closer to the portal, the more the

negative impact.

In areas around the four portals of Tunnels 1 and 2, prices in Zone A fell by 9.2%.

This compares with a 2.4% rise in the housing markets that are “over” the tunnels.

In Zone B house prices fell by 2.3% in areas just preceding the tunnel entrance. In

comparison prices rose by 19.3% in the properties “above” the tunnel. Zone C

showed almost equal rise in the two samples. The negative effect of the portals on

values therefore diminishes with distance (see figure 13).

This pattern is repeated when we observe the portals individually (except for the end

of Tunnel 2). Figure 14 looks at the start Tunnel 1. In Zone A there was a fall of

24.1% in the area at the tunnel entrance compared with a rise of 50% in the over-

ground section of the tunnel. In Zone B we saw a fall of 17.1% at the entrance area

compared with a rise of 46.3% over the tunnel area. Zone C showed a rise of 5.9%

in the over ground sections compared with a fall of 14% over the tunnel.

Figure 15 illustrates changes in values on the proposed line at the end of Tunnel 1.

In Zone A there was a fall of 2.1% between periods 1 and 2 in the over ground

sections compared with a rise of 1.9% over the tunnel. In Zone B we saw a rise of

9.3% in the over ground sections compared with a rise of 9.3% over the tunnel.

Zone C showed a rise of 6.2% in the over ground sections compared with a rise of

8% over the tunnel.

Figure 13. Values in Period 1 vs 2 - All properties All tunnel portals

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Tunnel Entrance Over Tunnel Tunnel Entrance Over Tunnel Tunnel Entrance Over Tunnel

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Figure 14. Values changes Period 1 vs 2

- All properties Start of Tunnel 1


- All properties End of Tunnel 1

Figure 16 shows that in Zone A at the start of Tunnel 2, there was a fall of 10.7%

between periods 1 and 2 in the entrance sections compared with a rise of 0.1%

over the tunnel. In Zone B we saw a rise of 2.4% in the entrance sections compared

with a fall of 2.4% over the tunnel. Zone C showed similar rises regardless of

location.

Figure 17 shows that in Zone A at the end of Tunnel 2 there was a rise of 10.9%

between periods 1 and 2 in the over ground sections compared with a fall of 19.8%

over the tunnel. In Zone B we saw a rise of 3.1% in the over ground sections

compared with a fall of 39.5% over the tunnel. Zone C showed a fall of 2.9% in the

over ground sections compared with a rise of 2.0% over the tunnel.

Figure 16. Values changes Period 1 vs -

All properties Start of Tunnel 2


- All properties End of Tunnel 2

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40%

60%

Tunnel Entrance

Over Tunnel

Tunnel Entrance

Over Tunnel

Tunnel Entrance

Over Tunnel

A B C

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(%

)

(60)%

(40)%

(20)%

(0)%

20%

40%

60%

Tunnel Entrance

Over Tunnel

Tunnel Entrance

Over Tunnel

Tunnel Entrance

Over Tunnel

A B C

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(%

)

Source for both: Land Registry; CB Richard Ellis Research




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THE

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THE IMPACT ON SALES VOLUMES

From this analysis we conclude sales volumes have weakened at the tunnel portals

(where trains would emerge). While this relationship is only evident in Zone A close

to the portals, it is nonetheless a significant finding.

Figure 18 shows that all tunnel portals In Zone A there was a fall of 12.1% between

periods 1 and 2 at the tunnel entrance compared with a rise of 21.6% over the

tunnel. In contrast, the areas at the tunnel entrance rose in Zones B and C (by

17.7% and 9.2% respectively) compared in the areas adjacent to the tunnels (-7.2%

and 0.6%).

Figure 19 shows changes in sales on the proposed line at the start Tunnel 1. In

Zone A there was a fall of 50% between periods 1 and 2 at the entrance compared

with a rise of 0% over the tunnel. In Zone B we saw a fall of 6.2% in the over

ground sections compared with a fall of 20.3% over the tunnel. Zone C showed a

fall of 7% in the over ground sections compared with a fall of 12% over the tunnel.

Figure 20 shows changes in sales on the proposed line at the end of Tunnel 1. In

Zone A there was a rise of 0% between periods 1 and 2 in the over ground sections

compared with a rise of 5.5% over the tunnel. In Zone B we saw a rise of 35.5% in

the over ground sections compared with a fall of 3.1% over the tunnel. Zone C

showed a fall of 5.5% in the over ground sections compared with a rise of 4.5%

over the tunnel.

Figure 18. Sales volumes Period 1 vs 2 - All properties All tunnel portals

(25)%

(20)%

(15)%

(10)%

(5)%

0%

5%

10%

15%

20%

25%

Tunnel Entrance Over Tunnel Tunnel Entrance Over Tunnel Tunnel Entrance Over Tunnel

A B C

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(%

)




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THE

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Figure 19. Sales volume changes Period

1 vs 2 - All properties Start of Tunnel 1


1 vs 2 - All properties End of Tunnel 1

Figure 21 shows that at the start Tunnel 2, in Zone A there was a rise in volumes of

19.7% over ground compared with a fall of 6.8% over the tunnel. In Zone B we saw

a rise of 38.5% in the over ground sections compared with a fall of 6.7% over the

tunnel. Zone C showed a rise of 18% in the over ground sections compared with a

fall of 3.8% over the tunnel.

Figure 22 shows changes in sales on the proposed line at the end of Tunnel 2. In

Zone A there was a rise of 2% between periods 1 and 2 in the over ground sections

compared with a rise of 22.2% over the tunnel. In Zone B we saw a rise of 8.7% in

the over ground sections compared with a rise of 66% over the tunnel. Zone C

showed a rise of 11.2% in the over ground sections compared with a rise of 26.8%

over the tunnel.


1 vs 2 - All properties Start of Tunnel 2


1 vs 2 - All properties End of Tunnel 2

(60)%

(40)%

(20)%

(0)%

20%

40%

60%

Tunnel Entrance

Over Tunnel

Tunnel Entrance

Over Tunnel

Tunnel Entrance

Over Tunnel

A B C

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(%

)

(60)%

(40)%

(20)%

(0)%

20%

40%

60%

Tunnel Entrance

Over Tunnel

Tunnel Entrance

Over Tunnel

Tunnel Entrance

Over Tunnel

A B C

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(%

)

(60)%

(40)%

(20)%

(0)%

20%

40%

60%

Tunnel Entrance

Over Tunnel

Tunnel Entrance

Over Tunnel

Tunnel Entrance

Over Tunnel

A B C

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(%

)

(70)%

(50)%

(30)%

(10)%

10%

30%

50%

70%

Tunnel Entrance

Over Tunnel

Tunnel Entrance

Over Tunnel

Tunnel Entrance

Over Tunnel

A B C

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(%

)





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THE

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VALUES AND VOLUMES ALONG THE TUNNEL ROUTES

In the first two sections of this report, we considered changes in values and volumes

in overland sections of the report. We also examined the tunnelled sections.

However, in tunnelled sections we did not determine any clear relationships

between proximity to route and housing market activity. This stands to reason as

the housing market should not be affected by the line inside a tunnel, as the

surrounding area shouldn‟t experience noise impacts to the same extent (as if the

tunnel over ground).

For tunnel 1, prices in Zone A fell by 3.4% whereas in Zones B and C they rose by

17.1% and 10.9% respectively (see Fig. 23). Volumes on the other hand rose in

Zone A by 22.4% compared with a rise of 2.4% in zone B and a 1.7% fall in Zone

C (see Fig 25).

In Tunnel 2, prices in Zone A fell 0.7% and by 4.1% in Zone B and risen

significantly by 26.4% in Zone C (see Fig. 24). Volumes in Zone A rose by 7.5%

compared with a fall of 0.4% in zone B and a 2.4% rise in Zone C (see Fig 26).

Figure 23. Values in Period 1 and

Period 2 - All properties (Tunnel 1)

Figure 24. Values in Period 1 and Period

2 - All properties (Tunnel 2)

Figure 25. Sales in Period 1 and Period


Figure 26. Sales in Period 1 and Period


0

100

200

300

400

500

600

700

800

900

1,000

(25)%

(20)%

(15)%

(10)%

(5)%

0%

5%

10%

15%

20%

25%

Zone A(T1) Zone B(T1) Zone C(T1)

Average prices P

eriod 1 and Period 2 (£'000)

Cha

nge

Per

iod

1 vs

Per

iod

2 (%

)


0

100

200

300

400

500

600

700

800

900

1,000

(30)%

(20)%

(10)%

0%

10%

20%

30%


Ave

rag

e p

rice

s P

erio

d 1

an

d P

erio

d 2

(£'0

00

)

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(%

)


0

500

1,000

1,500

2,000

2,500

(25)%

(20)%

(15)%

(10)%

(5)%

0%

5%

10%

15%

20%

25%


Total sales Period 1 and Period 2 (no.)

Cha

nge

Perio

d 1

vs P

erio

d 2

(%)


0

500

1,000

1,500

2,000

2,500

(25)%

(20)%

(15)%

(10)%

(5)%

0%

5%

10%

15%

20%

25%


Total sales Period 1 and P

eriod 2 (no.)

Cha

nge

Per

iod

1 vs

Per

iod

2 (%

)





Conclusion

Page

30

CONC

LUSI

ON

Conclusion


Conclusion

Page

31

CONC

LUSI

ON

7

Conclusion


Conclusion

Page

32

CONC

LUSI

ON

The purpose of this report was to observe property values and transactions levels both pre

and post the announcement of the proposed route of High Speed 2 between London and

Birmingham.

Our principal observation was that both sales volumes and values were generally lower

after the announcement than before near the proposed route.

This was certainly the case when looking at the over-ground route as a whole where sales

values fell in Zone A, rose in zone B and rose further in Zone C (see Figure 1). We observed

a similar pattern for sales volumes

When we considered changes in values for individual property types, we found this pattern

was largely repeated, but with some exceptions. These were generally linked to the small

sample sizes of certain property types in certain area, in particular detached properties in

central London.

In addition, we compared the impact in rural areas versus urban areas. We found that

while rural areas appeared to be affected, this was not the case for urban areas.

Figure 27. Summary of conclusions

Price change in Zone A

Changes in sales volumes in Zone A

Whole overland line 1.3% 4.5%

Whole overland line – urban areas 2.3% 8.0%

Whole overland line – rural areas 4.9% 0.7%

Tunnel portals 9.2% 12.1%

Our research also showed that prices and activity were negatively affected at tunnel portals

– that is where the train would emerge from a tunnel. In contrast there was no such affect

over the tunnel or where the train runs underground. However, given the localised areas

with just a handful of postcode sectors, the sample sizes were very low, which led to volatile

behaviour, so these findings are less reliable.

The results for the tunnel areas were inconclusive. This largely reflects historically low levels

of transactions, which currently characterise the UK property market and makes accurate

analysis difficult. In addition Tunnel 1 runs through areas of prime central London, which

has recovered more quickly from the downturn than areas further out. This area is likely to

have a large number of other factors influencing values and transaction levels.


Appendix 1 - Methodology

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1 -

MET

HODO

LOGY

DO NOT DEL

APPENDICES



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1 -

MET

HODO

LOGY

The purpose of this report was to study the behaviour of housing markets close to the

proposed High Speed 2 rail link between London and Birmingham. In these areas we

studied residential property values and transaction levels before and after the

announcement of the proposals in March 2010.

We did this using Land Registry data which provided the number of transactions and the

average value of each postcode sector (e.g. “B12 5”) in the UK for four periods (two

quarters either side of the announcement of the proposed route.

We then used Geographical Information System (GIS) technology to map the route of the

proposed line between London and Birmingham. We overlaid postcode sector boundaries

on top of the route and removed all areas which were other than three closest postcode

sectors to the line.

We sub divided the remaining areas according to how close they were to the proposed line.

The postcode sectors which the proposed line runs through we called Zone A. We defined

Zone B as the next set of postcode sectors away from the line and Zone C as the next set

still (see Figure 30 below). This allowed us to see whether or not the market close to the

proposed line had been affected differently to areas further away. For more information,

see the appendices.

For more detailed analysis of the nature of the line, we further defined areas where the line

becomes a tunnel (as opposed to being overland). We also defined where the line was

running through more and less densely populated areas, with densely populated areas

being those with more than 5 dwellings per hectare.

From this point the analysis simply compared differences in residential property values and

transactions levels before and after the announcement. This was repeated across a;; of the

geographical sub divisions described above.

Figure 30 –Simplified analysis Zones in reference to the proposed route of HS2


Zone B

Zone A

Zone C HS2 route

Postcode sectors

Tunnel Tunnel zones

Source: CB Richard Ellis Research


Appendix 2 – The Route

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2 –

THE

ROUT

E

The route of the train line was mapped by hand onto CBRE‟s Geographic Information

System. This was done by referencing the following plans, available at:

http://www.dft.gov.uk/pgr/rail/pi/highspeedrail/hs2ltd/route/

High Speed Two Preferred Line of Route

HS2-ARP-07-DR-RW-03101








HS2-ARP-07-DR-RW-03109 - Revised





















Key Plan –


High Speed Two West Midlands Junction

Key Plan –







All Published: 11 March 2010


http://www.dft.gov.uk/pgr/rail/pi/highspeedrail/hs2ltd/route/



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ROUT

E

Map 1 – Proposed route with positions of tunnels

Map 2 – Proposed route zoomed to Tunnels 1 and 2

Source: Ordnance Survey; CB Richard Ellis Research



Appendix 3 - Tunnels

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3 -

TUNN

ELS

Map 3 - Start of Tunnel 1 – identifying postcode unit

Map 4 - End of Tunnel 1 – identifying postcode unit






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Map 5 - Start of Tunnel 2 – identifying postcode unit

Map 6 - End of Tunnel 2 – identifying postcode unit (best fit/adjacent)




Appendix 4 – Analysis Zones

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S ZO

NES

Use of Postcode Sectors

In this paper we have used postcode sectors as the basic geographical unit for all analysis.

Postcode sectors have been chosen because of their size and compatibility with Land

Registry data. In England the average postcode sector has 2,800 dwellings in it and covers

1900 hectares. This may seem large but each postcode sector has on average only 21.9

sales per quarter, and a sample of 20 is an absolute minimum in property market analysis.

It is beyond the scope of this report to identify which properties are more or less affected by

the proposed railway line. Individual properties will be affected by aspect, height relative to

neighbouring properties and relative position. In this report we assume all properties in

Zone A will be equally affected and do not account for any other factors.

In Zone A, the average size of each constituent postcode sector 1,656 hectares. This means

on average Zone A runs 2.29km either side of the proposed railway line.

Data analysis Zone where line is over ground

Data analysis zones are defined by the position of postcode sectors (e.g. “HP6 5”) relative

to the proposed rail route. There are three zones and they are defined thus:

• Zone A – All postcode sectors the proposed line passes through

• Zone B – All postcode sectors which touch Zone A

• Zone C – All postcode sectors which touch Zone B (Control sample)

The purpose of Zone A is to capture areas closest to the proposed line. Zones B represents

areas likely to be less blighted and C represent a control sample against which we can

compare changes in activity. See map 7.

Data analysis zones where proposed line is a tunnel

In this report we treat analysis zones through a proposed tunnel passes differently. Where

Tunnel 1 runs through a postcode sector, we call it Zone A(T1). Equally where Tunnel 2 runs

through a postcode sector, we call it Zone A(T2). Zones B and C work essentially in the

same for tunnels as they did for the normal railway line. However, where a zone could be

considered either as relating to a tunnel or an over ground section, the latter takes

precedence. See map 8 and 9.

More and less densely populated areas

In this report we have also differentiated between more and less densely populated

postcode sectors. Using census data we established the number of dwellings per hectare in

each postcode sector. We used the national median figure of 5 dwellings per hectare to

separate the sample into more and less densely populated areas. This definition is separate

from the data analysis zones and therefore permits another level of analysis. See map 1.




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Map 7 – Analysis Zones A, B and C along whole proposed line

Map 8 – Analysis Zones A, B and C along tunnelled sections of the proposed line





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Map 9 – All of Zone A running through more and less dense areas (tunnels

excluded)

Map 10 – Zone A along tunnelled sections through more and less dense areas.



Urban

Rural

Tunnel



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Map 11 – Analysis Zones around Tunnel 1 portals

Map 12 – Analysis Zones around Tunnel 2 portals




Appendix 5 - Data

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43

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5 -

DATA

Source

All data in this report comes from HM Land Registry.

Time Span

The original data was split into four quarters like so:

As the High Speed 2 proposals were released in March 2010, we have group together the

first and second quarters into “Period 1” and the third and fourth into “Period 2“. We

therefore can compare between the data before and after the release of the proposals.

Variables

The analysis looks at sales volumes and average prices. The original Land Registry data are

split down further into:

• Detached

• Semi-Detached

• Terraced

• Flat/Maisonette

• Total

Calculations

Changes for prices are calculated by taking the average price for all postcode sectors in

Period 1 and comparing it to Period 2:

Average((Period 2 Prices)- Average(Period 1 Prices)) / Average(Period 1 Prices)

Changes for sales volumes are calculated by taking the sum of transactions for all postcode

sectors in Period 1 and comparing it to Period 2:

Sum((Period 2 transactions)- Sum(Period 1 transactions)) / Sum(Period 1 transactions)

Appendix 5 - Data

Oct - Dec

2009

Jul - Sep

2010

Jan - Mar

2010

Apr - Jun

2010

Period 1 Period 2

Publication of proposals


Appendix 6 – Glossary of Terms

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APPE

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6 –

GLO

SSAR

Y OF

TERM

S

Period 1 October 2009 to March 2010

Period 2 April 2010 to September 2010

Zone A Postcode sectors the proposed line passes through

Zone B All postcode sectors which touch Zone A

Zone C All postcode sectors which touch Zone B

Tunnel 1 NW1 7PS to W3 6XA (see map 2)

Tunnel 2 WD3 9XW to HP7 0EJ (see map 2)

Sales volumes Sum of Land Registry transactions

Values Average of Land Registry values

More densely populated areas Areas with more than 5 dwellings per hectare

Less densely populated areas Areas with fewer than 5 dwellings per hectare

Appendix 6 – Glossary of Terms


Appendix 7 – National and Regional analysis

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IONA

L AND

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IONA

L ANA

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S

Figure 28. Changes in sales values before and after the announcement of the

proposed High Speed 2 route in all of England and Wales by house type

Figure 29. Changes in sales volumes before and after the announcement of the

proposed High Speed 2 route in all of England and Wales by house type

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Flat/Mais Terraced Semi-Det Detached

Ch

an

ge P

1 v

s P

2

(8)%

(6)%

(4)%

(2)%

0%

2%

4%

6%

8%

Flat/Mais Terraced Semi-Det Detached

Ch

an

ge P

1 v

s P

2




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L AND

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IONA

L ANA

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S

(15.0)%

(10.0)%

(5.0)%

0%

5.0%

10.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(20.0)%

(15.0)%

(10.0)%

(5.0)%

0%

5.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(2.0)%

0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(30.0)%

(20.0)%

(10.0)%

0%

10.0%

20.0%

30.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

Figure 30. Changes in values before and after the announcement of the proposed

High Speed 2 route in the counties through which the line runs by house type

Flats Terraced

Semi-detached Detached



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L AND

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L ANA

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S

0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

Figure 31. Changes in values before and after the announcement of the proposed

High Speed 2 route in the regions through which the line runs by house type

Flats Terraced




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L AND

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L ANA

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S

(30.0)%

(25.0)%

(20.0)%

(15.0)%

(10.0)%

(5.0)%

0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(18.0)%

(16.0)%

(14.0)%

(12.0)%

(10.0)%

(8.0)%

(6.0)%

(4.0)%

(2.0)%

0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(16.0)%

(14.0)%

(12.0)%

(10.0)%

(8.0)%

(6.0)%

(4.0)%

(2.0)%

0%

2.0%

4.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

(20.0)%

(15.0)%

(10.0)%

(5.0)%

0%

5.0%

10.0%

15.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

Figure 32. Changes in volumes before and after the announcement of the proposed

High Speed 2 route in the counties through which the line runs by house type

Flats Terraced




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L AND

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L ANA

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S

Figure 33. Changes in volumes before and after the announcement of the proposed

High Speed 2 route in the regions through which the line runs by house type

Flats Terraced


(9.0)%

(8.0)%

(7.0)%

(6.0)%

(5.0)%

(4.0)%

(3.0)%

(2.0)%

(1.0)%

0%

1.0%

2.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2

0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Ch

an

ge P

erio

d 1

vs P

erio

d 2



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L AND

REG

IONA

L ANA

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S

It is beyond the scope of the report to distinguish “high end” properties as we only classify them in terms of their Land Registry property types. The report only considers house type and proximity to the route and does not account for:

House type-specific seasonal supply/demand variations

Issues affecting local markets

Issues affecting demand for particular types of property

Macro-trends in mortgage lending

Inconsistent sample sizes owing to local sales patterns

It should also be noted that the smallest geographical boundaries are relatively large and it

is possible that (as the route skirts around towns) zones B and C may be more „urban‟ than

zone A.

Appendix 7 – National and Regional analysis Appendix 8 – Study Limitations


Appendix 8 – S

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S

Appendix 8 – S

HIGH SPEED 2 BLIGHT STUDY - WhatDoTheyKnow

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Transcript of HIGH SPEED 2 BLIGHT STUDY - WhatDoTheyKnow