PropertyInvesting.net: Property Investment Special Reports

304: London 2012 Olympic Regeneration - Property Investor's Update

01-17-2010

PropertyInvesting.net team

The Olympic construction is on track to deliver the project by early 2012. Early scepticism has been replaced by a quiet acceptance - the project is currently running under the budget (base plus contingent) though over the original base budget *(with contingent funds). Timing is broadly on-track. Hence much of the project risk has been reduced.

 The immediate economic benefits to London will not be game-changing, but the re-development of the Stratford and surrounding parts of East London will have a huge lasting positive impact. A year after the Olympics, the Park will be re-opened. There will be continues building in parts of the area after 2012. It is envisaged that Stratford will become a desirable place to live with access to St Pancras in 7 mins by fast train, excellent tube links to all area, DLR links and the Eurostar to Paris and Brussels. Okay, it will never be like the West End - but the impact of all the new developments, employment and construction when finished will almost certainly lead to high property prices. The percentage of deprived homes will reduce. And the proximity to City, West End, Dockland, Eurostar and City Airport will all help. Stanstead is also a 50 min bus ride away. So this part of East London is definitely worth considering investing in. Whether you gauge the value to be higher than more established places like Clapham, Battersea and West End is the key call for investment returns. Our steer is - if you can find low priced large properties in Stratford in need of relatively low cost improvements that can add value, it could be a lucrative move to invest in this area. 

We have enclosed below the PropertyInvesting.net London Property Hotspots map to help you, as a property investor, pin-point the most prospect areas for asset price increases from early 2010 up to 2012 and beyond  - it provides a summary of many of the key investment areas within East and South-East London which are likely to be positively impacted by the following new infra-structure developments in the next ten years:

• South London Line tube extension via New Cross, Brockley and Peckham (mid 2010)
• East London Olympics (2012 based in Stratford)
• Dockland Light Railway extension to Woolwich (2008)
• Tube extension to Hackney (end 2010)
• Crossrail - Stratford to Heathrow (2018) - go-head given 2008  
• Eurostar International Station at Stratford and St Pancras (finished 2007)
• City airport expansion (ongoing)
• Canary Wharf office space expansion (ongoing)

London Map Property Hotspots - including Olympic Regeneration and Potential Boom Areas -key areas for property investment and high returns in run up to 2012 Olympics

 

 

 

 

 

 

 

 

 

 

 

 

 

PropertyInvesting.net map Oct 2008 

 

Properties purchased close to the new rail/tube stations and infra-structure projects, preferably within quiet Victorian neighbourhoods, are likely to see significant above trend house price movements in the next ten years, continuing the trend experienced in the last 5 years. Why? Because the population of London is forecast to expand by another 600,000 people by 2015 - we cannot foresee anything like the house building required to keep up with this demand. In addition, London is likely to remain a critically important global financial and services centre - providing solid and relatively high paid employment. This despite the recent financial turmoil Oct 2008 which lead to the recession for the whole of 2009 - we expect a fairly rapid recovery early 2010 with end year growth at about 2.5% moving into 2011. We also do not expect the recent tax on bonuses to 50% to have any significant impact for six month on people leaving London - they will wait to see if a new government comes in, and whether this new government is less antagonistic to the financial services industry. 

If you consider the all new infra-structure developments together, then work out when these will occur and their overlapping spheres of influence from an general impact and time stand-point, you can then work out the highest change of positive change, and the biggest impact regeneration will have within these areas. If positive change and regeneration take place, it is highly likely the prices will firstly rise, and secondly rise at a high rate than surrounding areas. Good examples of areas with profound overlapping spheres of influence are:

• Bow and Bow Church
• Stratford
• Hackney Wick
• Plaistow
• West Ham
• Hoxton
• Canning Town
• Shoreditch
• Kings Cross
• Woolwich North
• Woolwich
• New Cross
• Limehouse
• Brockley
• Forest Hill
• East Peckham
• Surrey Keys
• Crystal Palace
• Croydon
• Leytonstone
• Forest Gate

These are some of our top potential regeneration hotspots for the next four years in the UK - all of these will be positive impacted by the Olympic Games, East London Line, Eurostar (High Speed One), City and Canary Wharf financial developments, and Docklands Light Railway extensions. 

The key to the property price increases which are anticipated from mid 2009 to 2012 is the Olympic regeneration and development programmes planned and being built. Billions of pounds will be spent regenerating previously derelict areas of the Lower Leas Valley around Stratford and southwards to the River Thames. These developments will improve rail, tube, road and general infra-structure which will:

• Make East London more desirable to live for wealthy workers
• Improve social and economic conditions in this deprived area of London
• Increase employment, business and public sector employment and wealth
• Thence increase property prices and rental prices
• Give high return on investment for property investors - this is our expectation (from mid 2009 onwards, we advise holding off from purchase until the bottom of the market is reached - we expect this to be mid 2009)

Below is provide a selection of maps and images to provide you with a database showing where the key new developments will be and where the Olympic events will be held. As a general rule, the larger the positive change and the larger the infra-structure investment, the higher the property price increase will be for used (existing) property. 

If you locate good quality Victorian property in quiet streets close to the new developments, you will probably see large price increase after 2009. Examples are:

• Forest Gate - beautiful terraces between Stratford and Forest gate south of the rail line
• Stratford Village - 0.5 miles SE of the main town/city centre just north of Ham Park

If you walk around these areas, you will be able to images how they may look like Kennington or Fulham one day - if the infra-structure developments transform East London as some people expect. It will never be West London, but the centre of gravity of London has been and will be pulled eastwards in future years as East London becomes more desirable to live in.

So what’s certain?

Not much, but a few things in the UK that we believe have some certainty around them:

 

• London Olympics 2012 – regeneration of East End
• East London Line rail extension – 2010
• Eurostar – fast commuter trains to Ebbsfleet, Folkestone, Ashford, Stratford

Note – soon you’ll be able to commute from Folkestone to London in 49 minutes – that’s amazing! It will be quicker than Brighten to London – surely it will have a positive impact on property prices in this regenerating town. 

 

Hence our London property hotspots map stays as relevant as ever – the news that Keira Knightley has just bought a £2.5 million pad in Shoreditch is a good anecdotal indicator of the popularity of this enclave of London – close to City of London, West End, Olympics, City Airport and the Eurostar at St Pancras Station and Stratford International Station. Despite all the gloom coming from the financial institutions of the City, UK GDP in the financial sector only dropped 1% last quarter, whilst business services dropped 0.5% - and as we have been warning – the big loss has in manufacturing with a massive -4.7% drop. Manufacturing in general is located in the Midlands and North of England. So London is surviving better than most other areas up until now, and will probably be the first out of the recession as business/financial services start to kick-up again and the four pronged stimuli finally manage to kick-start the economy. Yes – there will be jobs losses in the financial sector, but so far banks have been trimming by ca. 10% rather than culling. Many have just stopped hiring for 2009.

 

So in summary, we would only invest in London at present – with focus in the hotspots areas described below. We would currently avoid areas with second homes, manufacturing areas and areas with many public sector jobs – with regret this wipes out most of the UK – some 70% of jobs in Scotland are public sector related - there may need to be cut in the next few years as the Chancellor runs out of money (or the Tories get into power and cut back public spending). We would try to invest in areas with big new infra- structure development, new jobs, construction and regeneration – with exposure to a projected improving financial and business services sectors starting late 2009.

 

Please scroll down through the comprehensive collection of maps, photos, images and regeneration and rail plan below to be used as a resource for your property investing. It should give you a valuable insight into regenerations schemes in the capital of England.  We hope you have found this Special Report helpful - if you have any comments, please contact us on enquiries@propertyinvesting.net  

 

 

London Olympics Stratford Plan View

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

London Olympics Site Stratford 2012 - potential property boom area

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

London Olympics 2012 Stadium Plan Stratford

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

London Eurostar Stratford "High Speed One" Rail Regeneration Project -

with trains to Paris-Brussel-St Pancras

 

 

 

 

 

 

 

 

 

 

 

 

 

 

London 2012 Olympic Velodrome Stratford in the Lower Leas Valley Regeneration Zone

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Olympic Park - Stratford Regeneration Area and London Gateway Regeneration zone

(Barking, Woolwich, Gravesend)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

East London Railway Extensions - Regeneration Areas for 2010 - Propery Hotspots for period 2010-2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West Hendon and Cricklewood Regeneration Areas - West London

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

London Battersea Wharf Regeneration Property Hotspot - SW11 in SW London

 

 

 

 

 

 

 

 

 

 

 

 

 

London Battersea Power Station Regeneration Area - a property hotpot area just south of Chelsea  - a new tube station is planned close to the river. The Nine Elms US Embassy complex was also announced mid 2009 and will be ready in a few years time - this new development should drive property prices higher in areas like Vauxhall, Kennington, Nine Elms etc.  

 

 

 

 

 

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