Olympic property boom for east London

Wednesday, 6 July 2005 12:00 AM

Mortgage lenders and estate agents are predicting a rise in demand for property in east London after the International Olympic Committee chose London to host the 2012 Olympic Games.

The award of the games will provide a further boost to an area already benefiting from plans for thousands of new homes as part of the regeneration of east London and the Thames Gateway.

Research by Halifax reveals that the regeneration effects from hosting an Olympic Games has generally had a positive impact on house prices.

According to its data, each of the previous four host cities have seen house price rises above the national average over the five-year period in the run-up to the games.

Barcelona was the best performing city in recent history, seeing prices rise by 131 per cent in the five years to the 1992 Olympics, compared to the national average of 83 per cent.

Tim Crawford, group economist at Halifax, said: "This is great news for London. Hosting an Olympic games encourages city regeneration and is usually accompanied by an improvement in facilities and transport links. These factors tend to be positive for house prices. Homeowners in Hackney and Stratford, could potentially reap similar benefits to other Olympic precincts over the longer term."

The Spicerhaart group of estate agents is already planning to open a new Felicity J Lord branch in Stratford to respond to the expected increase in activity.

"The trend in growth of housing and economic prosperity is only set to continue as prices are realigned with the west of London," said Spicerhaart managing director Russell Jervis.

However, Alliance Trusts has warned that the scale of development in the run up to the Olympic Games could put a strain on local resources.

Hugh MacNish Porter, Alliance Trusts' head of property, said: "The Olympic Games will be a catalyst that will accelerate the regeneration of the Thames estuary, development that arguably would have happened eventually but at a slower pace.

"In the run-up to the Games, however, the scale of development may put a strain on local resources, especially in the construction sector and there will be a knock-on effect felt by property developers involved in non-Olympics projects who will find it harder to get skilled workers so the cost of construction projects may rise in the short-term."

He added that the longer-term effect would be less pronounced in London since the property market "is already so well-established".

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