Taxpayers to lose out over "Crossrail effect" on property values ©4Corners Images Crossrail interchange at Tottenham Court Road Taxpayers will claw back only a fraction of the rise in commercial property values related to a £14.8bn London rail route because of its "crude" funding structure, according to transport experts. Crossrail, a new east-west line due to open in 2018, has sparked office development at stations on the route, such as Tottenham Court Road and Farringdon. Crossrail figures estimate the price of commercial space along the line will climb 10 per cent over the next decade, above an already rising baseline projection. Some say policy makers should have worked harder to make sure commercial benefits that will go to landowners near the stations are passed on to taxpayers. Christian Wolmar, a transport expert and author of a history of London Underground, said, for example, that Tottenham Court Road was an established business centre that had good potential for higher rents. It's perfectly located and begging for more intensive use. He said the "crude" structure of the London business levy system that contributes to Crossrail's costs ought to have been supplemented by an extra rate within half a mile of every station, or a phased rate depending on distance from the station. In the UK we've never developed a sophisticated way of capturing that added value. If you'd charged an extra pound or two per square foot in rates from the outset you'd not have deterred takers," Mr Wolmar said. Of the £14.8bn cost of the route, the mayor of London (via Transport for London and the Greater London Authority) contributes £7.1bn. The government is giving £4.7bn in grant funding and London businesses are paying £4.1bn through a variety of mechanisms. The package was fixed in 2007 and confirmed by the coalition in 2010. Isabel Dedring, Boris Johnson's deputy mayor for transport, acknowledged that the funding structure captured only "a fraction" of the rise in values from Crossrail. But she added future London transport projects would be designed in a "smarter" way. David Hughes, director of major programme sponsorship for Transport for London, said Crossrail's 10 per cent boost to London's rail capacity would bring benefits far beyond the immediate areas the line will serve. The largest businesses in London pay the Business Rates Supplement and these are mainly in the key business districts of the capital including the West End, City, Docklands and Heathrow. These areas are major beneficiaries of Crossrail. According to Patrick Scanlon, a partner at estate agent Knight Frank, the Crossrail effect has coincided with a trend for companies to move back in to central London, reversing a 20-year exodus driven by the need to cut costs. Businesses are finding that they can't attract the calibre of staff they want, so they're coming back [to London] . . . But within central London, many are less choosy now than in the past about which area they locate themselves in. Kevin McCauley, head of central London research at property agent CBRE, said: "Crossrail triggers new development and the scale of the change in both Farringdon and Tottenham Court road is huge." Developers have snapped up sites around the east end of Oxford Street - for example, Great Portland Estates recently won planning permission for a £550m scheme at former Royal Mail depot Rathbone Place. Meanwhile, a series of buildings around Farringdon with sitting tenants have been bought by developers who intend to wait until the leases end in four or five years before they redevelop the sites. Amazon has led the trend to move to central London, leasing a new building from developer AXA Real Estate at Holborn Viaduct near Farringdon Station. Goldman Sachs is also developing its new European headquarters in Farringdon. Crossrail will transform the area's antiquated station into one of Britain's busiest - it will become the only London station that will allow travellers to take mainline trains in the direction of all four points of the compass. With access to Crossrail, Thameslink and London Underground, it will also have a direct connection to three of London's airports. Victorian planners had similar designs for Farringdon: in the 1850s they proposed it as London's hub station but dropped the plan when a commission decided the scheme was too disruptive. "A hundred and seventy years after it was originally conceived, Farringdon will become the central hub of the railway system," said Mr Wolmar. Crossrail will also benefit areas outside central London: in the east, Stratford is attracting investment from universities keen to develop campuses and the Docklands area is likely to see further growth. While a regeneration scheme in Hayes, west London, is set to create 4,000 jobs.