London, Property and 2012
What do athletics and house prices have in common? It’s not a joke, it’s a perfectly legitimate question… Give up? The Olympics.
An article from Reuters UK dated February 2007 explained that house prices had risen an average of 15% since London’s winning bid in July 2005. The highest prices were found in Leytonstone, Hackney and Clapton with 23%, 21% and 18% price rises respectively.
The last four hosts – Athens, Sydney, Atlanta and Barcelona – all showed mark-ups on their house prices when compared to the rest of their national markets, where Barcelona was the most impressive with almost a 50% mark up in comparison to the rest of Spain. However, it should be noted that these price rises all took place amongst property booms – not the slump we are experiencing or will experience in years to come.
Online property forums have demonstrated a mixed response from the public, where investment has been viewed in both positive and negative lights – those arguing the former have defended their arguments through the rise in Stratford house prices – a perfectly legitimate argument as East London homes generally start at a much lower base price than homes in other parts of the city and therefore price rises shall remain comparatively large.
However those against investment argue that after the Athens Olympic Games, there was a surplus in apartments on the housing market. Olympic developers Bovis Lend Lease are concerned that London’s property price crash will reduce the amount it would have benefited from selling or renting the homes in East London after the games. The Royal Institute of Chartered Surveyors have defended this opinion, warning that property boosts due to the Games has only been large when the city could re-invent itself, which explains the huge mark up in Barcelona.
Stratford’s property challenge therefore rests not only on the shoulders of London’s Olympic committee, but also on those of all us Londoners. Whether Stratford’s new sports, entertainment and tourism facilities continue to function depends very much on the willingness of London’s professionals to invest and live within the area once the games have ended. Though rubbing elbows with the millions of visitors expected to arrive for the games may not be everyone’s ideal, there is little doubt that the Olympics offer a genuine opportunity for the rejuvenation of the maligned east end. Perhaps then the Olympic effect could be the shot in the arm London needs given the recent slump in the UK housing market.
For further information on the current housing market and expert opinion on the Olympic effect, visit the Property News page on Knight Frank UK.
