Prices of homes close to London's Olympic Park fell over the past year as signs of revitalization in one of the U.K.'s poorest areas failed to materialize and overseas buyers focused on more central districts.
Residential property values near the 560-acre site in east London fell as much as 7 percent in the year through July, Zoopla.co.uk said yesterday. Homes near the Olympic Stadium have risen about 19 percent since the city won the right to host the 2012 Games five years ago, compared with a gain of 27 percent across the capital, the real estate website said July 25.
"The eastern region is one that has perhaps bypassed the central London international demand," Nicholas Leeming, business development director at Zoopla, said in a telephone interview. "With the Olympics, you would have thought it might have responded better."
Beginning a year from today, the Olympics will be held in the east London borough of Newham, the sixth-most destitute district in England out of more than 350 assessed by the government. London beat Paris and New York to host the Games after telling the International Olympic Committee that the event, to cost an estimated $15 billion, would revive the east of the city.
Home values near the Olympic Park will rise after the construction on the site is complete and when Europe's largest urban shopping mall, Westfield Stratford City, opens in September, said Clive Dutton, Newham borough's executive director for regeneration, planning and property.
"What we're doing is creating a new part of London," Dutton said in a telephone interview today. "The smart investor will look with keen interest on this part of London."
Luxury-home prices in central London climbed to a record in June as overseas buyers took advantage of a weak pound and sought a haven from political and economic instability in their home countries, broker Knight Frank LLP said July 1. By contrast, the region surrounding Newcastle in northeast England, saw values fall an annual 6.9 percent, the worst-performing area in England, according to the Land Registry.
"East London boroughs are much like the national story," said Yolande Barnes, research director at property broker Savills Plc. "The north-south divide opening up in the country as a whole actually is an east-west divide in London."
The average price in Stratford, home of the 80,000-capacity Olympic Stadium and part of the Newham borough, fell 3.9 percent to 226,008 pounds in the past year, according to Zoopla. Prices in neighboring East Ham fell 7 percent to 206,020 pounds.
"The impact of the Olympics on the international psyche has yet to happen as the games haven't happened yet," Barnes said by telephone.