Sam Dunn: 'Should we wait for the Olympic effect?'

House Doctor
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The Independent Online

Question: We live near Stratford in east London, and are planning to sell and move to a bigger house. However, should we put it off for a couple of years to cash in on the anticipated house price-boom around the "Olympic effect" in the run-up to 2012 games? Diane Jameson, London

Answer: During the housing boom of summer 2005, when London was picked for the games, the sense of national joy may well have been most intensely felt in the pockets of East End homeowners living near proposed stadia. Of course, the credit crunch and recession have since put paid to hopes of a quick buck.

Yet the 2012 games and all they look set to offer the community – vastly improved transport links, world-class sport and leisure facilities and a more salubrious living space – continue to exert a powerful pull on property owners.

In early 2007, research into the "Olympic effect" from Halifax suggested that areas close to the Olympic complex benefited most.

For the Sydney 2000 games, it found, house prices in adjacent suburb Homebush soared 70 per cent in the five years during the Olympic run-up, compared to an overall 50 per cent increase in Sydney house prices.

Host cities average five-year price increases of 66 per cent against an average rise in host nation house prices of 47 per cent. But it's worth stressing that this historic trend doesn't mean the same will happen in London.

"If prices go up because of the Olympic effect, it's a bonus," says Melanie Bien of mortgage broker Savills Private Finance. "But that should not be the main reason why you move or stay put because there is no guarantee they will rise."

However, James Brooks at property agent Kinleigh Folkard & Hayward believes prices will rise above the rate of national trends.

"There is likely to be an increase in prices above the general market for those areas of Olympic regeneration, and a good argument for waiting," he says. "Some time in 2011 would be the optimum time to sell while the excitement's still there."

Of course, you'd expect estate agents, especially in east London, to talk up the market. Yet some brokers also favour your chances of good fortune if you stay.

"The chance of benefiting from staying is good," says Katie Tucker of MortgageForce. "If you can cope in the house you have for a year, why not also overpay your mortgage so you have even more equity when the time comes to move?"

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