The Effects of Infrastructure Projects on House Prices and Rents: Evidence from the HS2 Extension Cancellation in the UK

Wentao Zhu(Department of Mathematics, London School of Economics and Political Science)

Abstract

This paper uses the HS2 extension cancellation in November 2021 as a quasi-experiment to study its impact on house prices and rents in Leeds. Using a DiD approach on repeat sales and monthly rents, I compare property values near the HS2 station and proposed construction site before and after the announcement. Results show a 3.6% decrease in house prices and a 3.9% decline in rents near the station, while properties near the construction site experienced a 2.4% increase in prices and a 2.1% rise in rents. This is the frst paper to analyse the HS2 cancellation effect using panel data methods.

Keywords

HS2 extension cancellation; Externalities; House price effects; Transport infrastructure; Difference-in-Differences Model

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Data

HM Land Registry, “HM Land Registry Open Data: ’Price Paid’.” Retrieved from https://

landregistry.data.gov.uk

Zoopla API. Retrieved from https://developer. zoopla.co.uk/

HM Land Registry, “UK House Price Index.” Retrieved from https://landregistry.data.gov.uk

HM Land Registry, “UK Private Rental Price Index.” Retrieved from https://landregistry.data. gov.uk

ArcGIS by ESRI, “OS locator: ESRI World Geocoder.”

Digimap, “Leeds postcode boundary shapefiles.” Retrieved from https://digimap.edina.ac.uk

HS2 route data. Retrieved from https://www.gov. uk/government/publications/hs2-phase-2bwest-midlands-to-leeds-route-section-map

DOI: http://dx.doi.org/10.26549/jsbe.v7i2.19155