The Olympic Effect: How the 2012 Olympics will affect the local property market
The costs are stratospheric and the media hype no less so. With all eyes on the nation's economy, the expenditure on the 2012 London Olympics is a hot topic. But what will the longer term effects be on the surrounding area, and what are the plans for the park itself once the games are over? Zoopla takes a look.
Far from anticipating a one hit wonder, the Olympic Legacy Committee (OPLC) has big plans, which span 25 years and include the potential construction of 11,000 homes, with a big emphasis on family living. Due to be renamed the Queen Elizabeth Olympic Park from 2013, it is hoped the park will become a residential, cultural, sporting and entertainment centre attracting both home-buyers and visitors from across the world.
As the proposed map below shows, the park will be split into five neighbourhoods, displaying a variety of design styles from modern Georgian and Victorian squares and terraces to luxury riverfront apartments. The idea is to provide a viable alternative for families looking for more spacious, affordable accommodation, without them moving out of the city into surrounding counties.
© Olympic Park Legacy Company
The expansion will be supported by improved transport; plans include a high speed rail link taking commuters from Stratford to St Pancras in just seven minutes, as well as increased tube, DLR and overland services.
Employment opportunities should be significant, with a network of new businesses, schools, nurseries, health centres, community and faith spaces and of course, recreational and entertainment facilities.
London Mayor Boris Johnson commented: "I am extremely pleased that there is such a focus on delivering family-sized homes in this unique, new district emerging in our city. As well as the desperate need in London for larger homes, I cannot think of a better place for families to settle and children to grow up. They will create the vibrant new communities so important for its success."
Pricing remains to be seen of course, and no-one is suggesting the plans are confirmed, but if the OPLC gets its way, a brand new area of East London may be about to open its doors.
With the development of Canary Wharf and of course, the O2 Arena, 'new' is nothing new in our capital's East End. But with so much of the enormous Olympic budget said to be focused on the East's regeneration, can we expect to see house prices and rentals on the rise too?
Property experts have been watching the so-called 'Olympic Effect' since the triumphant bid was announced in 2005; LloydsTSB figures show an overall increase of 26% across the East in the last five years, though bear in mind that in the same period, they state average increase in total London house prices as 36%. Certainly some areas have seen significant increases - Shoreditch, for example, with an average property price increase in the last five years of over 50%. It is impossible to say whether such increases are directly attributable to the Olympics, or the natural regeneration of a previously neglected segment of the city, sparked in part by the O2 Arena area improvements at the end of the 1990s and the affluent financial centre of Canary Wharf, with its associated residential developments.
Zoopla figures over the last year show steady increases in house prices across the east though, despite the current economic climate. Forest Gate, Homerton and Leystonstone all show rises of over 6% between November 2009 and 2010, while the London average was 1.6%. Clapton and Dalston, both considered not so long ago rather undesirable areas, have both risen over 5% in the same period and exponentially in the years before that. Closer to the site, Bow, Stratford and East Ham have all seen similar rises, and even out as far as Plaistow, increases are continuing.
Rental is looking positive too, perhaps boosted by the economic climate curbing lending so significantly. Over the period of the games themselves, it is claimed that owners could make an average of £2000 per week for renting out their properties*. Longer term it is harder to predict, but if the park does become an international attraction there should be plenty of opportunity for both short- and long-term lettings to increase in the coming years.
Time will tell whether the plans will be executed fully, but the legacy of improvements in infrastructure and the global media attention on the area would suggest that East London should see further property price rises over the coming years, which could have a wider impact on property in Essex and the M11 region as well. Watch this space.
* figures from HomeAway Holiday-Rentals