Can your proximity to recreational facilities cause an increase in your house’s value?
Recreational facilities can add value to your home and cause a welcome increase in house prices generally. Seasoned property investors will always be looking for future developments that might have an impact on local property prices, and the building of leisure centres, running tracks, public swimming pools and professional sporting stadia can all have an impact. While most of the evidence suggesting a link between house prices and recreational facilities is anecdotal, there have been two high-profile developments that have made a real difference to house sales in the area.
Is the Olympic legacy having an effect on property prices and house values?
Zoopla.co.uk recently looked into the Olympic Park in London, and it appears that local property owners are benefiting from the park’s transformation into a leisure and residential area. The Olympic Legacy Committee has a 25-year plan that includes plans to develop cultural, entertainment and sporting facilities – making the area one of the most sought popular residential areas in the capital. Renamed the Queen Elizabeth Olympic Park, it seems that people who already live in the vicinity could receive a welcome boost to their own property valuations.
Although the Olympic Games only took place over two weeks in 2012, there has been evidence of rising property prices in the area since the winning bid was announced in 2005. Lloyd’s Bank has reported an astonishing 26 percent increase in house prices over the last five years – which is unprecedented in what has generally been one of the more deprived areas of the city. Shoreditch in particular has benefited greatly from the so-called ‘Olympic Effect’ as house values in the area have risen by more than 50 percent in the same period!
During a time of recession, a lack of credit and an average increase in house values across London of only 1.6 percent, the areas of Forest Gate, Homerton and Leytonstone saw net house prices increase by more than 5 percent during 2009 and 2010. And as the development continues to gather pace, the once deprived and now hip areas of Dalston and Clapton will probably enjoy higher-than-average house price increases during the next decade.
Do new football stadia affect local property values?
The national game of football has been transformed during the last two decades, and many new stadiums have been constructed in towns and cities up and down the country. While many local residents have objected to these super structures being erected in their own ‘backyards’ there is some evidence to suggest that home owners have benefited from them in terms of average house values in nearby neighbourhoods.
A joint study by the London School of Economics and the CASS Business School discovered that house prices around the Emirates and Wembley stadiums have risen by up to 15 percent since the new structures were opened to the public. In fact, evidence was uncovered that suggested property prices within 5 kilometres of the new stadia started to rise from the moment plans were announced. The house valuation rises were outstripping natural property inflation in other areas of London – suggesting that it was the new developments that were causing the increases.
More evidence of recreational facilities’ effects
The evidence was given further credibility when homes next to the new Emirates Stadium and the old Highbury Stadium were compared. Whereas house prices around the new facility were rising, a relative decline in property values was taking place around the site of Arsenal’s old stadium. This was considered as incontrovertible proof that these huge recreational facilities were having a direct effect on net house prices in the surrounding neighbourhoods.
There are times when a house sale needs to be completed quickly. However, if you know that new recreational facilities are being planned in your area, it may be worth waiting a while in order to take advantage of any effects the new development might have on the value of your property.