Property Firms Take a Big Bet on Olympic Effect; the Last in Our Series Looking at Business and the 2012 Games; OLYMPICS ANALYSIS
Byline: Hugo Duncan
THE 2012 Olympic Games promised to herald a housing boom in East London. That was before the financial crisis and property crash choked off investment and sent developers running.
So, with 840 days until the Games begin, can the Olympics deliver the lasting legacy the region needs? Regeneration is certainly taking place at the Olympic site in Stratford and beyond and property hotspots are appearing.
Figures from building society Nationwide show that house prices in Hackney have risen 129% in the past 10 years, in Waltham Forest 131%, Tower Hamlets 137% and Newham 151%.
Growth in these four boroughs -- which border the Olympic Park -- was faster than anywhere else in London over the last decade.
Much of it came in the first half of the decade, meaning it occurred before London was chosen to host the 2012 Games. With two years to go before the flame arrives, it has been a mixed start to 2010. In the first three months of the year, house prices were 2% down in Hackney and only 6% up in Newham, compared with growth of 15.7% for London as a whole. In Tower Hamlets prices were up 16% and in Waltham Forest 18%. "The challenge ahead will be attracting buyers from outside the local market to new schemes in Stratford, and establishing the area as one where higher-income households can relocate to," says Marcus Dixon, of estate agent Savills.
The process has already started, thanks in no small part to the transport network which includes two Tube lines, overland rail, the Docklands Light Railway and City Airport. The Eurostar and Crossrail will eventually pass through Stratford, connecting it directly with Heathrow and the continent.
Westfield Stratford City, Europe's largest shopping centre, opens next year and has already attracted stores such as Marks & Spencer and John Lewis.
Cate Dodkin of Foxtons says: "People from the West End of London usually get a nosebleed if you take them farther east than Holborn, but now they are coming out here and are impressed -- and they are buying, as are buyers from Europe and China. Canary Wharf used to be a lone tower in a wasteland in the Nineties and now the area is thriving. The same will happen with Stratford."
John Kennedy of Knight Frank adds: "Over half of our enquiries are coming from Chinese investors who have experienced first hand the Olympic effect in Beijing."
Prices in Stratford are still a third lower than in Greater London as a whole and one-bed flats start at around [pounds sterling]185,000 -- down 20% from their peak. …