The London Olympics Legacy
Mark Collins, Chairman of Residential at CBRE UK:
London Olympics Legacy text block
As the UK celebrates Team GB’s phenomenal success at this year’s Olympics, here at CBRE we have been considering the legacy of London’s 2012 games, and reflecting on some of the fundamental changes our capital’s property market has witnessed in the years following.
London 2012 had an aim to ‘inspire a generation’ of sports people, but it also wanted to help drive wider regeneration. In CBRE’s recent Olympic Legacy report, we examined 20 Olympic venues across the UK and found that in most cases price growth in these areas outperformed the wider area by an average of 29%. Zooming in on London, the Olympic Games acted as a catalyst for some of the capital’s largest regeneration projects. Areas surrounding the two Wembley venues demonstrated house price growth of 99%, while new sites in Stratford saw growth of around 10%. These areas have become established residential destinations, integrating homes, retail and commercial space, public realm and improved transport links to create new neighbourhoods, and are tangible examples of London 2012’s lasting legacy on the built environment.
The last four years has been a time of considerable change; we have seen a new government and a new mayor come in to power, both of whom have committed to making housing in London a priority in their agenda. There have been significant changes to property taxation policies, with the top end of the market being undeniably affected by stamp duty alterations; meanwhile the long term impact of Brexit on the London property market is yet to be fully determined.
Despite this, London remains one of the world’s most economically and politically stable cities. It continues to be a leading financial centre, with a world-class education offering and a rich multi-cultural tapestry. Its ever-expanding population has resulted in a consistently robust residential property market, with the average house price currently at £470,025 and over the last four years huge steps have been made to accommodate demand. In addition to the areas that benefitted from Olympic regeneration, London has seen some of the most successful and imaginative examples of placemaking in the world. Acres of land have been transformed, creating vibrant communities, new homes and better infrastructure. Not only does regeneration improve the urban aesthetic of our capital; it also has much deeper social and economic benefits and has been shown to drive uplift on property prices.
Paddington has been one of central London’s most successful regeneration programmes, accelerated by the arrival of several blue-chip companies to the area, as well as the hotly-anticipated Crossrail station in 2018. CBRE research shows that house prices in the area around Paddington Basin have increased by 12.9% per annum. September will see the launch of Meritas’ Paddington Gardens; a mixed use development delivering over 300 new homes, as well as landscaped gardens for both residents and the public – arguably the last piece of the Paddington regeneration story.
The last few years have seen some of the most ambitious regeneration programmes come to fruition, including the multi-billion pound Royal Docks redevelopment and Knight Dragon’s transformation of Greenwich – the largest single regeneration initiative London has ever seen. There are several other significant and varied projects still in the pipeline throughout London. Construction is well underway at Nine Elms, bringing the former industrial site to life, whilst simultaneously creating 20,000 new homes and 25,000 jobs. Meanwhile the area surrounding Tottenham Court Road continues to be revitalised, with Almacantar’s transformation of the iconic Centre Point building and piazza square, positioned just moments from the new Crossrail station, spearheading the redevelopment.
It is critical that placemaking remains at the heart of London’s housing agenda, if we are to continue to work towards fixing the supply and demand imbalance. Following May’s mayoral elections, we saw Sadiq Khan pledge to deliver 50,000 new homes a year. This is an ambitious target that will only be achievable if we continue to identify the parts of London that are not fulfilling their potential for housing provision, both in quality and quantity.
Personally, I believe that last few years have also highlighted the increasing importance of non-political bodies, such as the London Chamber of Commerce and Industry. With access to some of the industry’s most important organisations and individuals, these bodies can provide valuable support and advice on housing policy and are a driving force for the future direction of property.
With regeneration playing such a key role in the movements of London’s property market over recent times, it has also become clear how closely aligned the provision of infrastructure is with housing delivery. As London’s boundaries continue to increase, so does the need for better connectivity. New transport links enable housebuilders to unlock pockets of London that would not be viable for development without sufficient infrastructure, connecting residential destinations with business hubs and attracting commercial and retail centres to new areas. CBRE research revealed that by the time Crossrail is operational in 2018 it will have added up to £35bn to the residential property industry around the 37 stations. There have been some great steps made towards improving London’s transport links and with further projects in the pipeline, such as Crossrail 2 and the Bakerloo/Northern Line extensions, I believe infrastructure will continue to play a vital part in shaping London’s property market for many years to come.
London has overcome many challenges since it hosted one of the most memorable Olympic Games in history, and the property market has remained strong and robust throughout. At the time of writing we have just released our housing forecast and feel positive about the year ahead, anticipating house price growth to rise 5% this year. Here at CBRE we have a busy autumn ahead of us, with some key industry events in the diary, including the RESI Conference at Celtic Manor. I’m also heading off to Dubai’s Cityscape, where I look forward to seeing old and indeed and new friends, as we continue to showcase London as a world-class global city.