Second Gatwick runway could slash house prices by £40,000

Plans approved by the Labour government for a second Gatwick runway could see house prices plummet by up to £40,000, according to new data.

Research by estate agents Yopa reveals that the £2.2bn privately financed project is likely to cause short-term dips in property values for those living in the so-called ‘Gatwick Diamond’, which includes Crawley, Reigate and Banstead, Horsham, Mid Sussex, Mole Valley, and Tandridge.

However, Yopa says the second runway is expected to boost house prices in the long term.

Impact may be far more severe for homes closest to the project

According to the data, during the initial planning and announcement stage, before construction begins, homes typically see a small negative adjustment of between 1% and 5% due to buyer uncertainty and concerns over future noise and environmental disruption.

Based on an average reduction of 3%, Yopa’s analysis shows the biggest loss would be in Mole Valley, where average prices could fall by £16,205.

In Reigate and Banstead, a 3% decline would see sellers lose around £14,588 on the value of their home, with Horsham (£13,232) and Mid Sussex (£13,085) also seeing potential double-digit reductions.

However, once construction is underway and the runway becomes operational, the impact may be far more severe for homes closest to the project or under new flight paths. Yopa says the construction and ongoing presence of an additional runway could see prices in affected areas drop by as much as 7.5%.

This would equate to a reduction of £40,513 in Mole Valley, £38,270 in Tandridge, £36,469 in Reigate and Banstead, £33,080 in Horsham, £32,713 in Mid Sussex and £24,475 in Crawley.

Households could see as much as £40,000 wiped from the value of their home

Verona Frankish, CEO of Yopa, warns homeowners could be exposed to short-term drops in house prices.

She said: “Homeowners within the Gatwick Diamond will be understandably concerned about the potential impact of a second runway on property values across the local market.

“The near-term reality is that those directly affected by the construction and implementation of such a project could see the value of their home fall and, without certainty around details such as new flight paths, traffic, noise and air pollution, it’s likely to impact the local market as a whole, not just those who stand to bear the brunt of it.

“Such factors carry a negative impact on demand and saleability, and our analysis suggests that, in some areas, households could see as much as £40,000 wiped from the value of their home.

“The extent of this impact will depend heavily on how the project is managed and proximity to disruption, while strong noise insulation, clear limits on night flights, and improved transport links could help to mitigate some of the downside.”

A silver lining to the second Gatwick runway

However, in the long term, Yopa says house prices are expected to bounce back once the second Gatwick runway is completed, currently projected for 2030.

According to the data, in the year following the completion of the project, house prices could rise by an average of 9.5% as the economic benefits, including more jobs and improved transport links, begin to filter through to the local economy.

Ms Frankish adds: “There is a silver lining to the second Gatwick runway, as the delivery of new transport infrastructure often brings long-term economic benefits and this tends to filter down to an uplift in house prices in the years that follow the completion of such a sizeable project.

“So, whilst those directly impacted may see fluctuations in the value of their home during the initial phases, the long-term outlook is a positive one and the Gatwick Diamond could well be one area of the market to watch over the coming years.”