The government has approved transport upgrade funding along the London Overground for more frequent trains and a new station at Surrey Canal Road, to unlock additional housing developments.

In a statement, the government agreed to requests for £80.8 million from the GLA to support transport upgrades so that 14,000 homes can be built along the East London Line. The funding comes from the Housing Infrastructure Fund (HIF), which was set up in 2016 and funds transport upgrades that would be needed to allow additional housing to be built, such as more trains, new stations, or roads.

The value of the HIF is around £5.5 billion, and with the latest announcements, is now fully allocated.

TfL and the GLA have previously been allocated funding for transport upgrades under the scheme, for the DLR, to unlock some 18,000 new homes, while the current tranche of cash is to support improvements along the East London Line, which would be needed if a £2 billion housing development at Canada Water is to go ahead.

That development will see the current shopping centre and the buildings behind swept away and the whole low-rise area becoming a cluster of residential tower blocks.

There have already been concerns about how the Jubilee line would cope with such a huge housing development, so the London Overground capacity upgrade should help to alleviate some of those worries, as people could use the line up to Whitechapel then over to Canary Wharf on the Elizabeth line.

The housing development was also part of the rationale for the no-longer-happening pedestrian/cycle bridge across the Thames that’s now on hold due to high costs.

Although the exact details of how the new cash will be spent needs to be finalised, the funding is expected to see an increase in train frequency through the core of the East London Line from 16 trains per hour to 20 trains per hour. That’s to be achieved by new signalling works, power supply upgrade and additional stabling facilities at New Cross.

The very cramped Surrey Quays station gets a second entrance, which will run under the main road and be based on the north side, where the shopping centre car park is today. That avoids crossing two busy roads, which can take some time if you’re waiting for the lights to change.

The funding also unlocks improved bus facilities at Canada Water station to support three additional bus stands for a new bus route that would serve the new housing developments.

TfL has already indicated plans to increase capacity through the core of the East London Line with more trains terminating at Crystal Palace, subject to paths being confirmed by Network Rail. The new funding will support both two more trains per hour to Crystal Palace (from 4 to 6tph) and also two more per hour to Clapham Junction (also from 4 to 6 tph).

The additional trains to Clapham Junction would be needed as there is provision that the long-mooted station at Surrey Canal Road will be included. Some passive provision was included when the East London line was extended to Clapham Junction, but the developer of the housing estate going up in the area says that increased requirements for affordable housing meant it couldn’t fund the station as well. The station would also be given the “sexier” name of New Bermondsey.

Although the upgrades would in themselves generate a net surplus of fare revenue for TfL over a 60-year timeframe, it’s not possible for TfL to fund the upgrades itself at the moment, so it turned to the government’s HIF scheme for support.

The funding under the HIF needs to be spent by 2023, so that’s the deadline for the upgrades to be delivered.

Separately, Enfield Council has been awarded £156 million for Meridian Water to deliver rail works, road infrastructure, land remediation, flood alleviation and utilities to unlock up to 10k homes.