It is no secret that the London Olympics 2012 are to be predominantly hosted in the long-rundown Eastern part of the city (AKA East London, as in Eastenders). As a result the boroughs of Newham, Hackney, Tower Hamlets, Stratford and Waltham Forest, which were previously some of the most deprived in London, are now becoming somewhat chic.
The boroughs are being regenerated and now first-time buyers, owner-occupiers and investors are keen to buy houses in the area. What's more, according to agents the buyers are mostly from the aspiring middle class, who increasingly buy for the modern, coffee-shop lifestyle. But it is easy to overstate just how much of this is directly because of the Olympics. It is easy to think that it is all investors planning to capitalise on the high rents they can charge during the Olympics, but this is not the case.
Housing in these areas is much cheaper than the rest of London, and even the rest of east London, meaning that, unlike most boroughs in London, first time buyers can actually afford to buy here. Bow, which is just slightly further west, has only really seen an upturn in the last 5 years, but even it now is too expensive for most first time buyers. So, they have to move further east. While before the areas being rundown may have put buyers off, now that they are regenerating this is no longer a problem.
"We get a lot of single girls who want to buy here which is a good sign," says Ian Conway of Felicity J Lord's Stratford branch who is at the coalface of housing influenced by London 2012 accommodation. "Developments are safe and transport is second to none."
According to the firm, most of the buyers here are owner-occupiers, who are attracted by the more cosmopolitan atmosphere. "The regeneration of Stratford is great and even just looking outside our office, we can see they really cleaned it up: there are plants, there’s greenery. It's doing wonders for the area, because obviously Newham was the most deprived borough in London previously."
But they were regenerating before we won the Olympics. However, few people argue that getting the area ready for the event has not seen things pushed a lot farther a lot faster than they would have been had we had a different decision in Singapore in 2005 (when London won the bid to host 2012).
According to reports from previous Olympic Cities, the real benefit of the regeneration is not seen until after the event, and that would certainly look to be the case in London as well. If it were mainly speculative investors buying purely to cash in on the games, then the benefit would be limited after the event, and in fact may be partially reversed.
But because these are owner-occupiers and first time buyers buying because of the regeneration, the benefits will either long outlast the Olympics or become more pronounced when the chariots roll out. This is because, those buying now will be pretty much frozen in place until after the Olympics, not least because many are buying in new developments that won't be ready to move into until nearer Olympics time. After the event they can start to develop their properties, extensions, garages, conservatories etc, and also start to think about selling and moving up the ladder. Either way, these rundown areas are no longer that, and will become part of the mainstream London housing market for the foreseeable future.
- Monday 16 January 2012