New research by Hometrack reveals that the Olympics have yet to have an effect on residential property values in Stratford, the area adjacent to the Olympic site.
Measuring using a £ per square foot (£psf) basis, residential property values for the postcode E15 which covers Stratford have been 35% less than Greater London. This is a slightly bigger gap than the figure at 2001 when values were 30-35% lower. This is also a bigger gap compared to the announcement of the Games in 2005. At this time residential property values in E15 were only 10-20% lower than Greater London.
Richard Donnell, Director of Research at Hometrack commented:
“Given that the area around Stratford has been very much in the spotlight since 2006, Hometrack’s findings may come as something of a surprise. However, it should be remembered that as a regeneration project, the area is still in its infancy. The next 10-20 years will see the growth of a new residential quarter. Up to 11,000 homes are planned for the Olympic Park and Village sites alone, all in an area with a new ‘E20’ postcode. Off the back of this supply, new pricing benchmarks will emerge.”
Hometrack looked at the area surrounding the Olympic Park and there appear to be a divide between the east and west of the site. Areas in the west include the City and Islington. They are high value areas. Those to the east include Stratford and East Ham and are low value areas. In the centre is the unpopulated Lea Valley.
Richard Donnell adds:
“The challenge facing developers in E15 lies in increasing values from west to east and for investors, interest lies in the timeframe this will take to happen. The new supply of housing after the Games in the E20 postcode will need to find its level within the profile of pricing across London.”
It is interesting to note that residential values in this area remain around 30% lower than the Greater London average. It comes at the same time as the Guardian reports on rents in the area for the Games period. Much has been made of the possibility of charging high rents of up to £4000, but it is suggested that there has not been much take-up.
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