Focus Of The Month
Property Developers look towards Post-Olympic Legacy
When London won the right to host the 2012 Olympics, property developers were convinced that the Games would revitalise an area of the city associated with long-term downward trends. However, the much-vaunted 'Olympic effect' still seems to be more of a promise than a reality in the property market.
Rental properties immediately soared around the Olympic area before and during the Games, but the effects of the recession have heavily affected on-going development ambitions since the winning bid was celebrated in 2005. The results have been disappointing for some, with the huge infrastructure improvements and construction of many large sports facilities failing to push local housing prices upwards, despite representing billions of pounds in local investment.
Critics have pointed out that the building of stadiums doesn't necessarily boost local economic activity. It can, in fact, do the opposite, as is often seen in residential areas around football stadiums. Research carried out by New York University actually showed that only two out of five Olympic host cities in history saw an increase in property values.
In the run-up to the Games, the Olympic area attracted £1.6 billion of investment – primarily foreign and private – for commercial properties and homes. But price rises have been marginal and limited to small areas around the Olympic Park itself. There has been a 30% rise in the fourteen postal districts surrounding the Olympic Park since 2005, but this isn't far above the English average of 25% recorded in the same period. Additionally, the boost in figures has an unequal distribution, with hosting neighbourhood Stratford only seeing a 13% rise. Now the effects of a declining economy are starting to erode property values further in an area which has traditionally been one of the cheapest in London.
E15 is a former industrial area, with plenty of public housing and crowded homes jostling for space with corner stores and fast-food chains. The area has a mixed reputation and work is still needed to change its image in buyers' eyes. The hope now is for a slower, more incremental development in the area, as the effects of more train and tube lines are seen, along with the completion of Cross Rail in 2018, which will link Central and East London.
Investors remain hopeful that these developments will combine to start attracting families and young professionals to this traditional working-class area and we look forward to seeing the results of the post-Olympic legacy, remaining positive that it will be fully realised for buyers and sellers alike.