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 impact 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 affecting 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 to develop cultural, entertainment and sporting facilities – making the place 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 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 per cent increase in house prices over the last five years – which is unprecedented in what has generally been one of the city’s more deprived areas. Shoreditch, in particular, has significantly benefited from the so-called ‘Olympic Effect’ as house values in the area have risen by more than 50 per cent 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 per cent, the areas of Forest Gate, Homerton and Leytonstone saw net house prices increase by more than 5 per cent 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?
Over the last twenty years, the national football game changed with many new stadiums built. While many residents have objected to these superstructures in their own ‘backyards’, some evidence suggests that homeowners 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 rose by 15 per cent since the new structures opened to the public. Evidence suggested property prices within 5 kilometres of the new stadia started to rise when plans for the new stadium were announced. The house valuation rises outstripped natural property inflation in other London areas- suggesting that the developments were causing the increases.
More evidence of recreational facilities’ effects
Prices of homes next to the new Emirates Stadium and the old Highbury Stadium were compared, and it is evident prices around the new facility were rising. In contrast, there was a decline around Arsenal’s old stadium site, which was considered incontrovertible proof that these huge recreational facilities directly affected net house prices in the surrounding neighbourhoods.
There are times when a house sale needs to complete quickly. However, suppose you know that a new recreational facility is planned in your area, it may be worth waiting a while to take advantage of any effects the new development might have on the value of your property.