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Buy-to-let Investors Are Racing To Invest In East London Ahead Of 2012.

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London City’s poorest areas have seen their house prices rise dramatically thanks to the Olympics 2012 to be staged here. Tower Hamlets, an East End borough, has seen prices jack up by an incredible 12,000 pounds in a month. This area has Britain’s most crowded dwellings. Likewise its neighbouring borough Newham, which includes Stratford, posted a hike of 3.1 per cent.

While price rises were to be expected, £12,000 a month is pretty exceptional. The general view is that the entire housing market now "on the turn".

Buy-to-let investors are racing to invest in east London ahead of 2012. The Olympics are going to result in substantial investment in infrastructure, such as transport, in east London. That is going to make the area more accessible, popular and fashionable with renters and homeowners, pushing up prices.

East London will see a big upgrade in facilities as a result of the Olympics. The area will benefit from a 500-acre Olympic Park reaching from Hackney Marshes to the Thames, including a stadium, aquatic centre, several other sporting complexes and a 17,800-person Olympic village.

There are also proposals for a big increase in capacity on the London Underground’s Jubilee line, and plans for the creation of a transport hub in Stratford.

Some landlords believe it is too good an opportunity to miss. Peter Ong, 51, a professional landlord from Hendon, north London, is typical.

His previous buy-to-let purchases have all been in central London, but he has just bought a two-bedroom flat five minutes from Stratford Tube station.

He said: “I felt I couldn’t afford not to buy in view of the Olympic win. The potential rental from the property is not fantastic, but I hope to make big gains from the capital growth.”

But property experts are warning less experienced investors not to be rushed into a purchase.

It is generally accepted that property values will rise faster than the national average as the games approach. Previous Olympics bear this out.

The games were held in Athens last year and between 1999 and 2004 prices rose 63% in the capital compared with 55% for the whole of Greece, according to Halifax.

The areas closest to the action do best because they benefit most from the improved facilities and better transport links. House prices in Homebush Bay, a derelict industrial area redeveloped for the 2000 Sydney Olympics, rose 70% in the five years before the games, compared with 50% growth in Sydney as a whole and 39% for all of Australia.

On this basis the areas that have most to gain include Stratford and West Ham in the borough of Newham; Bow, in Tower Hamlets; and Leyton in Waltham Forest. There are also high hopes for Docklands, Hackney, Bethnal Green and Stepney.

Olympic fever has added to the upward pressure on prices. Sellers in Tower Hamlets, which includes Bow, Bethnal Green and Docklands, asked 2.2% more than the previous month. Newham, which includes Stratford within its borders, saw a 1.4% rise in asking prices.

Lateef Unisa-Begum, 37, had the foresight to purchase a one- bedroom buy-to-let flat in Hackney two years ago.

The career management consultant from Belsize Park in north London said: “The success of the Olympic bid has spurred me on to look for more buy-to-let flats in the area. But, because prices have gone up so much over the past two years, it’s hard to find properties with good rental potential.”

Even though house prices have been rising, rents have not been keeping pace. Graham Gould of Residential Property Investment Management said: “East End properties tend to attract student types rather than the professional sharers who are willing to pay the higher rents in other areas of London.”

A three-bedroom house in Stratford costs about £300,000 on average and rent is about £300 per week. That is a yield — the annual rental income as a percentage of the purchase price — of 5.2%.

In Stockwell in south London, by comparison, where professional sharers are more common, a three-bedroom house costs about £340,000 but the average rent is about £370 per week — a rental yield of 5.7%. So even though the property in Stockwell costs more, you get more for your money.

Christie of Property Bourse insists you can still make money in east London. Property Bourse’s scheme, the Urban Share Residential Investment Fund, will buy flats and houses with at least three bedrooms in the Docklands area. He said: “The proximity of Canary Wharf, a fast-growing centre of employment, makes it attractive to young professionals.”

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I own some property in e15. I did not buy this, but this was left to me.I rented one 4 bed house via an agent who has subsequently installed 12 (yes, twelve) people in there. That's what you are dealing with.

I know Bairstow Eves staff pretty well in Stratford,e15. After the first week of the Olympic annoucement the phone was ringing like mad. Slowly the non-sense has stopped and the withdrawal if sipps was quite significant as my contacts were getting enquiries from people who did not live in the area but were purely investing from other parts of the UK or abroad.

Even before the sipps withdrawal they went quite again but since that they are dead. Try them on 0208 519 3919 they won't take long to answer unless of curse they are reading this then leave it for a month or so.

Bairstow Eves are one of the main agents in Strartford, e15.Bairstow Eves are not the agents who I rented said 4 bed house through.

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