Cycle lanes boosting house prices by up to eight per cent, new study finds

A common theme that emerges any time a new cycling infrastructure project is mooted in or near a residential area is the opposition of some local homeowners, furious that the proposed bike lane will replace some of their on-street car parking spaces, or narrow the road, lead to the loss of trees, or even require them to look both ways before exiting their drive.

For example, in October a new cycle lane scheme in Stretford was branded the “biggest, most expensive cat litter tray in history” by one disgruntled resident, who claimed that he was “planning to move out” of the area he was so “fed up” with the project.

However, while many locals were quick to deride that Stretford scheme as a “complete waste of money”, new research has instead found that, if our “fed-up” resident did indeed put his house up for sale in protest, the cycle lane would have actually made him some extra cash.

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According to a new study conducted by Erez Yerushalmi and David Hearne, researchers in business and economics at the Birmingham City University and the University of Birmingham respectively, the proliferation of cycle lanes in Greater Manchester in recent years has caused the value of houses in those areas to jump by up to eight per cent.

The study, titled ‘The Amenity Value of Bicycle Infrastructure: A Hedonic Application to Greater Manchester, UK’, assessed a dataset of around 253,000 property sales in the area over a nine-year period using hedonic pricing, a method of identifying internal and external factors which affect an item’s value in the market.

Taking into account a wide range of characteristics related to the homes themselves and the local community, such as floor area, school achievements, and crime levels, the researchers concluded that house buyers are willing to pay more to live in areas that are closer to cycle networks.

They found that, by reducing the distance to the nearest bike lane by one kilometre, there was an average 2.85 per cent increase in property values across Greater Manchester.

Based on those figures, a property worth £163,000 in Greater Manchester (in 2019, when the study’s dataset concluded) would be worth an additional £4,640 if it were located a kilometre closer to the area’s cycle network.

The researchers also pointed out that this increase is equivalent to approximately £312 per year, based on an annuity calculation with a three per cent interest rate over 20 years. By comparison, commuters travelling similar distances spend more than £900 annually on fuel and car parking, or more than £500 on bus fares.

The closer you got to the centre of the city, meanwhile, the value in being close to a cycleway grows. In the central borough of Manchester, homes located close to a cycle lane were worth 7.7 per cent more than those located a kilometre away.

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According to the academics, these findings suggest an “unmet demand for bicycling infrastructure, one that property developers and policymakers are not yet aware of”.

Yerushalmi and Hearne also argued that this relationship between the value of homes and their proximity to cycle lanes in Greater Manchester – which, they note, is higher than that found in previous studies, mostly focused on the US – offers “planners a powerful tool to prioritise new cycling route investments”.

They say that, based on their approach, the Manchester Victoria Northern Eastern Gateway off-road cycle route could boost property values in nearby neighbourhoods by £16.6 million and deliver a benefit-to-cost ratio of 1.9.

In their paper, the researchers concluded that their findings “unequivocally demonstrate the link between bicycling infrastructure and its amenity value internalised by property prices.

“We therefore strongly urge local and central level policymakers and property developers to integrate bicycling infrastructure from the initial stages of design. Doing so will address unmet demands, foster better quality neighbourhoods, and yield improved sustainable environmental outcomes.”

However, with funding for cycling infrastructure in the UK reliant on the central government, they pointed out that “it is likely that local assets like bicycle networks will continue to be underfunded – a missed opportunity for health, happiness, and economic development.”

In any case, it’s hard to argue that cycle lane schemes in Greater Manchester are a “waste of money” now.