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HS2….Risks and Opportunities for Investors

It's pretty much accepted that new infrastructure links impact property prices to some extent. And new infrastructure projects don't come much bigger than the £32bn (estimated) High Speed 2 (HS2) rail project. With an expected completion date of at least 2026 it is, however, a little early to consider whether HS2 will foster a property boom in Birmingham or Manchester. So in this article we will consider another aspect of HS2. That is, the blight that is likely to be caused to properties along the route - and also what positive opportunities this might offer to investors.

While it can be the case that good infrastructure links enhance property values, the construction, completion and even the planning phase can affect them in a negative way too. Some savvy investors might be able to see the opportunity in these situations. That is, of investing in blighted property now at distressed prices and then reaping rewards in the longer term, once the dust has (literally) settled. Perhaps letting (maybe on lucrative lets to contractors working on the scheme) or redeveloping affected properties and/or benefiting from any compensation that is available. It's an interesting investment strategy but how, and where, might it work?

First, let us take in a little background to the scheme: HS2 will be a totally new electrified rail network between London, the Midlands, the northwest and Yorkshire, with possible future connections to Scotland and mainland Europe. Some sections on the 330 mile network will run in existing rail corridors and tunnels but most will consist of entirely new build surface lines. The intention is not only to provide a fast rail link (up to 250mph) between England's largest cities but to increase long distance passenger capacity and enable greater passenger and freight capacity on existing lines.

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