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Prof Henry Overman was puzzled by comments suggesting that the HS2 high speed link “will end the property price spiral in London and the South East” (15 January).

He noted that the uplift in ‘London commuting capacity’ from HS2 would be very small, so palpable property market impacts could only operate indirectly — via the growth and location effects of high speed rail.

[Prof Henry Overman, LSE Spatial Economics blog, 15 Jan 2014]

But HS2’s own figures suggest a large growth boost to London. As I have said before, I have my doubts about the magnitude of these figures but they are surely positive. In the absence of a supply response, this must make housing more expensive not less.

[…] In short it’s hard to see how something that boosts growth, and hence demand, in London (both absolutely and relative to other parts of the country not on the line) will do anything other than increase London house prices.

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Written by beleben

January 15, 2014 at 1:12 pm

Posted in High speed rail, HS2

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