TRAMS are expected to prove “a real boon” for homeowners, with property prices set to rise by as much as 15 per cent along the route.
Property experts have suggested homeowners within a mile radius of the 8.7-mile route from the airport to York Place will see a “considerable positive impact” on the selling price of their home.
Those within 800-metre walking distance of a tram stop will see the biggest rise, while those within a mile are also expected to see increases in the short term.
Homeowners within two miles are also expected to see a knock-on effect, with the price of their property likely to increase in the long term.
In Dublin, where trams were introduced in 2004, houses along the line saw their value rise above the general increase in prices by up to 15 per cent during the following two years.
ESPC business development manager David Marshall said: “Some studies in Dublin suggest that property values near the tram line appreciated by 15 per cent, and while it is probably optimistic to expect to see that level of growth here, we would still expect many homeowners to see the trams have a beneficial impact on the value of their home in the months and years ahead.”
As house prices soared in Dublin, further tram extensions were built, part-funded by developers keen to bring a public transport route close to their development.
In Edinburgh, the expectation is much the same, something which will boost hopes of a future tram extension down Leith Walk despite the Scottish Government ruling out providing any further cash for the £776 million project.
Mike Marwick, a senior partner with Marwicks Solicitors and also a member of the Cockburn Association’s transport committee, said: “The future completion of the initial route to Newhaven is important, since it should be the catalyst to restarting development to the north of the city.
“It is early days for the tram but, if experience elsewhere is anything to go by, the arrival of the tram should be a positive force for housing development and will increase marketability close to the currently curtailed route. It will take time to win hearts and minds, but the same was true in Dublin.”
There have already been signs that the city is seeing a trams-led premium in property values, with six deals worth around £100m signed on Princes Street at the end of last year.
Mr Marshall added: “Public transport is of importance to a large number of buyers so, generally speaking, you would expect that anything that helps improve transport links to have a positive impact on values of nearby properties.
“Edinburgh already has a strong bus network but the trams will still make it easier for a number of residents to get to and from the city centre as well as to places like the Gyle centre and Edinburgh Airport.”
One city neighbourhood which boasts a tram stop is Murrayfield, where the current average asking price for a three-bed home is £500,000, while a similar three-bed property in nearby Saughton – also on the route – is currently on the market for £175,000.
City transport convener Councillor Lesley Hinds said: “The improved and integrated transport links which the trams will provide for passengers from across of Scotland, the rest of the UK and Europe are bound to impact positively on house prices as well as attracting jobs and investment.”
As to what effect the tram line might have on rental prices in the city, Malcolm Cannon, of lettings agency Lomond Braemore, said that the situation would remain relatively steady for now.
He said: “Basically the rental property market is pretty well served along the tram route by the existing bus services, so I don’t think it’s appropriate for landlords to be raising rents.
“It’s likely in the long term that rental prices will rise, though. There is a dearth of properties in the rental market at the moment, that is why we need as many new properties as possible to keep a lid on rents.”
Commercial land along the route has already seen a rise in prices, with development land at the Gyle selling last December for £5m more than advertised.
A 60,000sq ft building and 48-acre plot to the south of the development were sold for £15m, well above the £10m which specialist agency Jones Lang LaSalle had expected when it invited offers in 2012.
The property belonged to New Edinburgh Limited, a joint venture between the city council and property developer Miller Group that fell into administration.
It is understood that more than 20 parties had bid for the lot, including property firms and sovereign wealth funds.
The tram line will have three stops at the Gyle, including the shopping centre and business park, when it finally becomes operational in May.
City economy convener Cllr Frank Ross said: “Edinburgh trams are expected to bring real economic benefits to the Capital and there is already evidence of the ‘tram effect’ driving development along the route – for example, the sale of development land at the Gyle at pre-recession prices in December.”
Another key transport project which is expected to lead to a rise in house prices for those in close proximity is the development of the Borders Railway line. The longest rail reopening project in modern British history is bringing areas long served only by bus and private car within reach of Edinburgh.
Passengers on the 30-mile route between Waverley and Tweedbank will be able to travel from end to end for less than £10.
And the first train of the day will allow commuters from the Borders and Midlothian to connect with early morning services from Edinburgh to London.
Property prices in the Capital have risen 4.6 per cent year-on-year and demand for prime city homes valued at more than £1m has also been boosted by overseas buyers, first quarter figures reveal. The city accounted for 59 per cent of all £1m-plus Scottish home sales in 2013.
City prices rose 1.3 per cent in the first three months of the year, the fourth consecutive quarterly rise, boosted by a 47 per cent annual rise in applicants and a 66 per cent rise in viewings.
According to Knight Frank, the best performing areas were New Town and West End, where property prices increased 1.5 per cent from January to March. In the south of the city, demand for family homes contributed to the overall 1.3 per cent price rise.
‘LUAS EFFECT’ FELT IN DUBLIN SUBURBS
The “Luas effect” in Dublin saw homes close to the tram lines report substantial increases in the years following their opening.
Within weeks of going live in 2004, estate agents began reporting an increase in inquiries about property along the routes from St Stephen’s Green in the city centre to Sandyford in the south and from The Point in the city centre west to Saggart.
A report submitted to the Dublin Transportation Office in May 2006 – two years after the Luas opened – found that “the anticipated effect on property and leasing prices has been largely realised”. When the Luas first arrived it led to a spike in house prices as leafy suburbs such as Ranelagh and Sandyford became easily accessible from the city centre and the tram provided an escape from traffic jams for thousands of commuters. The Luas also boosted the profile of suburbs such as Clonskeagh and Dundrum.
Several extensions have been added and the latest plan consists of joining up the two segregated lines to turn the routes into a network. Although sceptical of its benefits at first, Luas, which translates as “speed”, has exceeded expectations both in terms of usage and acceptance with the latest city centre extension proceeding despite the recession.
Luas carried its 50 millionth passenger in November 2006.
WHO WOULD BENEFIT MOST
SEVERAL areas are set to benefit from the tram passing through, namely Haymarket, Balgreen, Stenhouse, Bankhead and Ingliston.
Those living along the line, although optimistically hoping for a 15 per cent rise, are most likely in the short term to see a more modest rise.
Even at five per cent, that would mean the owner of a two-bed flat in Balgreen at £120,000 realising a £6000 rise when trams begin gliding past their door.
A two-bed flat in Stenhouse Drive currently selling for £100,000 could rise to £105,000.
The biggest winners could be those with two or three-bed family homes handy for those who wish to commute to the city centre without the hassle of parking or having to sit in traffic jams.
A large three-bed property on Murrayfield Avenue, for instance, with a current £540,000 asking price, could find £27,000 added to its value.
If Dublin-style 15 per cent price rises were realised, a whopping £70,000-plus could be added.
It is thought that a Leith Walk extension, if it does go ahead, could deliver an even greater return as it would coincide with regeneration of some deprived communities.