How to claim a share of the Olympic legacy
Buying a home built for the games may pay off, but be prepared to go the distance
Sunday 12 February 2012
All eyes are on London as the Olympics draw ever closer and although most of us are only interested in the medals, those looking to buy property could have a sporting chance of success too.
Stratford, east London, has a reputation for being rundown and a tad ugly but it has undergone a massive transformation in the past few years, boasting excellent transport links via the Eurostar and extended Docklands Light Railway plus the enormous £1.45bn shopping centre, Stratford City.
Investors and prospective buyers are hoping the Games will add to its appeal as a desirable place to live.
The Olympic Village will be converted into 2,800 flats and houses after the Games, half of which will be "affordable", and over the next 10 years a further 8,000 homes are due to be built around the Olympic Park. More than half the 2,800 prospective homes have been sold to Triathlon Homes, which has announced 675 will be given to councils for social housing, while the rest have been ear-marked as private homes.
Qatari Diar Delancey will own the rest of the homes, most of which are expected to be rented out. The area, to be known as East Village, will even have its own new E20 postcode.
"East Village will be a place for everybody to enjoy the best of city living; new homes will be joined by first-class education, outstanding sports and leisure facilities, local shops, cafes and restaurants, and unrivalled connections to the rest of the capital. This will be one of the most exciting places to live in London," says Stuart Corbyn of QDD.
On paper, the East Village will have a lot to offer, particularly for families, with the Chobham Academy for pupils aged three to 19 and 10 hectares of landscaped gardens, park areas and courtyards. E20 homeowners will also be able to make use of the Olympic facilities; not many Londoners can take a stroll to their local velodrome, or pop into the state-of-the-art medical centre once it has finished providing treatment for athletes.
developers are diving in to stake their claim on the other 8,000 homes. New owners have moved into parts of the Stratford Halo development, which overlooks the Olympic stadium, and there are also 91 apartments available on a shared-ownership basis.
You can buy a 25 per cent share of a one-bed starting from £55,000 (market value £220,000) and £65,000 for a two-bed (market value £260,000). As a buyer you can purchase between 25 and 75 per cent of the property, increasing that share to full ownership at any time. Other private flats in the development will go on sale in the autumn, costing from £260,000.
"As there will be in the stadium, there will be winners and losers with the Olympic property legacy. Canny developers are hoping to ride the 2012 wave and have picked up sites and funding on the back of the London 2012 hype," says housing expert and commentator Henry Pryor.
However, he adds that yields (the returns that letting represents as a percentage of the capital value charged by developers) seem thin. "Prices for second-hand property in the area are trending downwards," he says.
there is a lot of work to do before the village buildings are ready to move into, including fitting kitchens as the athletes dine in a central canteen. only time will tell if the village will become part of a thriving community.
Despite the developments, Stratford is still something of a neglected area. It will be a stretch for some to imagine living in an area associated with high crime and unsightly buildings, even with a sparkly new shopping mall and improved travel links.
Data from estate agents Your Move show prices in the borough of Newham rose by only 2 per cent in the year to December compared with London's overall 3 per cent rise and it comes 31st out of 33 for average prices. It is also questionable whether all the changes will be beneficial. big shopping centres and a football stadium aren't to everyone's liking, with people flooding in causing heavy traffic.
Despite these doubts, regeneration can have a real impact on property prices. The question is whether this will bring about a long-term change. If you buy into the Olympic dream you will be banking on the fact that £9.3bn of public money will have a lasting effect. There is a real danger that this urban regeneration will start to droop soon after. There is also a risk that developers will get ahead of themselves and the market will be flooded with too many new homes, dragging house prices downwards.
It may be prudent to look to other places benefiting from renewed infrastructure in and around the Docklands area. There is a great deal of development in Silvertown, which has seen transport links vastly improved, including Waterside Park (under Barratt Homes), on the Thames Barrier.
A more surprising beneficiary of the Olympics may be Weymouth, Dorset where the athletes' village, near the sailing venue, will be turned into sustainable homes by developer ZeroC, which has set prices at £135,000 for one-beds, £160,000 for three-beds and £260,000 for four-beds, most of which have been sold.
Whatever the location, anyone interested in buying should look back at Olympic sites such as Athens and Beijing, which serve as a stark warning as to how things can turn sour. The same may not be true of London, but it is important to remember that investing in Olympic property is not a sprint. there is no fast buck to be made: you need to be ready for a marathon.
David Cole, 57, Chiswick
Some people are planning to benefit from the Olympics in other ways by renting out their property rather than buying one built for the Games.
David Cole is looking to escape London when the Olympics take place, and will be enjoying a family holiday in Bali instead. While he is away his six-bed home in Bedford Park, Chiswick, will be rented out to a doctor from Seattle, earning David an impressive £940 per night.
"It all came about by accident. We were looking at ways of contributing towards our travel plans now that the kids are off to university and leaving home," says David. Once the Games are over, the rental will fall back to its standard rate, but this is still a very healthy £250 per night.
He and his wife came across One Fine Stay and had a couple of lets with them last year before deciding that they could also make the most of the Games.
David says the process couldn't be easier with One Fine Stay preparing the house before guests arrive and putting it all back in order when they've gone.
"From our perspective having someone in the house while we're away is great. We live in a nice area and it's a regular target for burglaries, plus the money will be put towards going abroad," he says.
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