Olympic 'homes' fail to rise in value

The Olympics Park in East London. The cost of staging the Olympics has risen to £11bn (AFP)

The roar along Stratford High Street was almost as loud as the one in Trafalgar Square when, seven years ago, London won the bid to host the 2012 Olympic Games. Pound signs appeared in residents' eyes while estate agents frantically warned potential buyers to move fast, predicting that house prices would rocket as the area was reborn.

Now new research shows that property prices in the E15 area, where the gleaming new Olympic venues proudly sit on what organisers claim was once an "industrial swamp", are 35 per cent lower than central London, and almost the worst in the capital.

When the games were announced in 2005, the differential was between 10 and 20 per cent, according to new research published by Hometrack, which values properties for almost all the leading mortgage lenders.

The Olympic Village contains 3,000 homes. A further 8,000 are planned for the five neighbourhoods to be constructed on the park, as well as 2,500 new homes surrounding the site. These building projects account for an 80 per cent rise in housing in the area.

In Shepherd's Bush, west London, a similar distance from the city centre as Stratford, prices are an average 73 per cent higher. West London has always been more expensive, but the arrival of the Olympics was supposed to narrow the gap. Richard Donnell, Hometrack's director of research said the results "may come as something of a surprise," but said that "as a regeneration project, the area is in its infancy."