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The Olympics and first time buyers in East London

Background

The success of the London Olympic Bid will lead the East London property market to outperform the rest of the country during the run up to the 2012 Games. For the next seven years, this part of London will experience the most intensive regeneration and development in the country.

Superior property price growth is a common factor experienced by all Olympic host cities during the run up to the various Games of the last few decades. Apart from the actual event itself, there are many causes for the relatively better house price growth experienced by cities hosting such events.

Causes of Property Price Appreciation in Olympic Cities

Area Regeneration

Prior to 1992 Barcelona’s coastline was one of the least desirable sections of the city. They seafront that now is home to the Olympic Village is now one of the most desired property locations. The Olympics’ greatest legacy in Barcelona was the total makeover of an area that was once full of disused warehouses and dilapidated industrial land. The Olympics helped turn Barcelona into one of the top tourist destinations in Europe. All these factor significantly affected house prices – Barcelona experienced above a three-fold increase in house prices during the six years prior to 1992.

In the words of DPM John Prescott the Olympics development programme, the largest in the country, will integrate with the regeneration work continuing in the Thames Gateway to ensure that we not only create an event, but a long-term set of leisure facilities, homes, jobs and thriving communities.

The Games will bring great environmental benefits by reclaiming contaminated land. The area proposed for the Olympic Village is the Lower Lea Valley in East London. This area has great potential as an environmental zone, with its unique network of waterways and marshland. At the moment, the area is described as a ‘brownfield site’. This expression is used to define areas which are underdeveloped, derelict, contaminated or vacant. As well as becoming home to the proposed Olympic Village, this area will be the biggest new park London has seen since Victorian times.

Improved Transportation Links

In 1992 Barcelona, Spain’s second-largest city, lacked decent road access and had an antiquated airport. The Olympics brought huge investment to cure these problems.

The East London Line Extension is vital to London’s 2012 Olympics bid and is an important part of the potential legacy. The new “”super-station”” – Stratford City – will send trains to Europe in one direction and Scotland (and St Pancras) in the other.

As part of an already-committed, long-term spending plan, more than $30 billion will be spent on London’s transportation system prior to 2012. These include:

  • extension of the Docklands Light Railway (DLR) in east London – including to London City Airport
  • 50 per cent capacity enhancement across the DLR network
  • extension of the East London line
  • refurbishment and modernisation of all London Underground stations
  • 45 per cent increase in capacity on the Jubilee Line, which will serve the main Olympic facilities
  • a new “super-station” – Stratford City – that will send trains to Europe in one direction and Scotland (and St Pancras) in the other.

Reduction in Unemployment

A professor of European economics at the Autonomous University of Barcelona, claims that investment in the area helped reduce Barcelona’s unemployment rate from 18.4% in 1986 to 9.6% in 1992.

As a result of the Sydney 2000 Olympics, according to a report by PricewaterhouseCoopers, businesses in New South Wales won over £400m in contracts, regional firms won over £130m of business, and 55 000 people received employment-related training.

The London Bid Team claims that the Olympic Park area alone will generate 12,000 new jobs, in sectors as diverse as construction, tourism and the media.

New Sports Facilities

As well as inspiration, the Games will provide more resources to make getting healthy in London easier. Some of the sporting facilities built for the Olympics and Paralympics will be kept after the Games for elite sports and community use – including the Olympic Stadium, the Aquatics Centre, the Velopark, the Hockey Centre and the Indoor Sport Centre.

Opportunities for First-Time Buyers

The good news about the Olympics for First-Time Buyers is that the future development and growth will be in areas affordable to them. Below are a few of the areas worth investigating.

Stratford E15

The regeneration of Stratford was intrinsic to the successful London bid. The Olympics will bring to E15 the new 500-acre Olympic park, transforming the physical landscape of the area, providing world-class sports facilities and easy access to the biggest urban park created in Europe for more than 150 years.

Hackney E3

Although E15 will benefit from most of the Olympic related regeneration, E3 will be the second biggest beneficiary. Nearly one quarter of the land needed to host the Olympic precinct is in Hackney. With terrace houses available for less than £250,000, this area currently has some of the most affordable property in the Capital.

Other Areas

The rest of East London will benefit from the knock-on effects of regeneration and transport improvements. The principal areas to consider are along the Lea River Valley. While Canary Wharf has a shortage of property costing less than £250,000 there are still good opportunities for first-time buyers in areas such as Poplar and the southern parts of the Isle of Dogs. The Royal Docks, in E16 does present more affordable opportunities, in an area which will directly benefit from improved transport links. Studio flats can be purchased here for less than £110,000. The DLR extension will bring stations to West Silvertown, Pontoon Dock, the City Airport and George V Dock.