A study of six recent and ongoing London regeneration projects, by property consultancy CB Richard Ellis, has found that homes on the fringes of key sites enjoy substantially better growth than those further away in the same area.
The biggest winner, according to the study, was Stratford. Researchers analysed price changes of properties within ten minutes of the Olympic Park and the new Westfield shopping centre between 2006, when construction began, and early September 2011.
They found that homes in the adjoining boroughs, Newham and Tower Hamlets, increased by an average of 5.6 per cent a year during the six year period (which included the boom years of 2006 and 2007, as well as the recessional years that followed). But within ten minutes of the Stratford regeneration site and Olympic Park, they went up by an average of 14.1 per cent - some 8.5 per cent better.
The same pattern was observed around the O2 Centre in North Greenwich since 2004. Homes close to the building work increased in value by 10.6 per cent each year, compared to just 3.9 per cent in the borough as a whole - an uplift of 6.7 per cent.
Homes close to all six regeneration zones outperformed their neighbourhoods, with the biggest out-performances found in the more run down areas. In Paddington Basin, for example, a relatively modest uplift of 3.4 per cent may be explained by the fact prices around the basin were being compared to those across Westminster, one of the strongest swathes of real estate in the UK.
Jennet Siebrits, head of residential research at CB Richard Ellis, said the data proved that regeneration has a major impact on house prices, but only very close to the regeneration project. “Regeneration clearly makes an area a more desirable place to live and this should cause a proportional rise in local house prices,” she said.
Research findings: house price changes across six regeneration zones
* Olympic Park and Stratford City (Newham and Tower Hamlets): 8.5 per cent annual uplift (local prices up 14.1 per cent a year compared to 5.6 per cent in the borough)
* North Greenwich (Greenwich): 6.7 per cent annual uplift (local prices up 10.6 per cent a year compared to 3.9 per cent in the borough)
* The Shard and London Bridge Quarter, Southbank (Southwark): 5.7 per cent annual uplift (local prices up 9.6 per cent a year compared to 3.9 per cent in the borough)
* Paddington Basin (Westminster): 3.4 per cent annual uplift (local prices up 12.9 per cent a year compared to 9.5 per cent in the borough)
* N1 development (Islington): 2.9 per cent annual uplift (local prices up 10.3 per cent a year compared to 7.4 per cent in the borough)
* Riverside Quarter (Wandsworth): 2.1 per cent annual uplift (local prices up 7.9 per cent a year compared to 5.8 per cent in the borough).