Written by: Pete Mugleston, Director, Online Mortgage Advisor
The London Olympics in 2012 were a huge success for the country. British athletes took home armfuls of medals, royal honours were handed out left and right and, for a short while, the whole country was filled with a sense of optimism; for both our sporting future and our economic one.
In the run-up to the games we heard plenty of talk about how our property market would benefit, buoyed by the huge investment that the Games would provide, and it would appear that the major investment in areas such as Newham, Barking, Dagenham Greenwich, Tower Hamlets and Waltham Forest did indeed act like a shot in the arm for the local market.
Newham has seen property prices leap by 64 percent since the games got underway, 11.2 percent higher than the London average of 52.8 percent, and the national average of 23.96 percent; while Hackney has seen a rise of 66.9 percent.
During the games, Eton Manor in Waltham Forest played host to many of the aquatic events, including water polo and synchronised swimming, and the borough has seen the most significant increase in property prices with a jump of more than 76 percent, leaving the average property price currently sitting at a healthy £422,333.
A resounding upswing
It's clear to see the positive impact that the Olympics has, and continues to have, upon the value of property within the areas directly adjacent to the Olympic Park, but high prices do not always indicate a market that’s full of vim and vigour.
In the period directly following the games, mortgage approvals actually fell to their lowest point in the past five years; to around 48,000 each month.
Thankfully there began a fairly resounding upswing, and by the beginning of 2014 approvals had leapt to their highest point since the start of the financial crisis in 2007. Following the twists and turns of the past three years, including the Brexit vote, they are currently sitting at around 65,000 a month, more than 10,000 a month higher than they were before the games began.
Reasons to be cheerful
If the Olympics delivered a boost to local property owners, renters haven’t been quite so fortunate though. The notable investment in key areas around the Olympic Park, coupled with a post-Brexit economy and low availability of finance, has seen rents increase; significantly in some areas.
Academic insight can give us an idea of how this growth might develop in the coming years, too. A study carried out by China’s HUST in preparation for the Beijing games, deduced that growth following the Olympics should continue for 15 years, and with our own games only five years in the past, we still have plenty of reasons to be cheerful.
The areas positively affected by the 2012 games are likely to continue their upward trajectory, with the added bonuses of Cross Rail and Chinese developer, ABP’s £1.7 billion project which aims to breathe new life in Docklands; turning it into an international business centre still on the horizon.