Sadly, it hasn't panned out that way. House prices in the E15 postcode of Stratford are roughly where they were at the end of 2005, having lagged behind the wider London market by a big margin. Stratford homes now trade at a 35 per cent discount to the Greater London average, compared with just 10-20 per cent back in 2006, according to property consultancy Hometrack. The global flight to quality that has so rewarded the residents of Kensington and Chelsea has been far more powerful than the Olympic regeneration story.
Investors who bought in the area on a five or seven-year view are probably now evaluating their options: sell up, or wait for the 'legacy' project to deliver the long-awaited convergence with Greater London prices. They need to bear in mind not just the wider picture, but also two radical experiments that are due to turn the buy-to-let business in Stratford on its head.
First, the games are due to unleash a vast quantity of housing supply. Once the sports are over, 11,000 new homes are planned for the Olympic Park and Village sites, and a further 2,500 for land nearby; together these projects will expand the E15 housing stock by 80 per cent. This is clearly welcome from a social point of view, but its impact on local house prices is far from clear. It may bring a new wave of gentrifying residents, as has happened further south around Canary Wharf. But it will also flood the market with supply. It will be a decade at least before the dust settles on these developments.
Second, Newham Council is about to introduce an extremely ambitious scheme to license private landlords. This is England's most aggressive attempt yet to regulate the private rented sector, with potentially major implications for investors even outside Newham. If the experiment is successful in clearing out 'sheds with beds' and 'rogue landlords', it seems likely to be repeated elsewhere. The Greater London Authority made clear in a recent report that it would be watching closely.
The project uses legislation from the 2004 Housing Act, called 'selective licensing', which allows councils to license private landlords in specific areas blighted by antisocial behaviour. In addition, landlords who run smaller 'houses in multiple occupation' (HMOs) - in which three or four unrelated tenants share a kitchen - will require an 'additional licence' (larger HMO landlords already need a licence under the 2004 Housing Act).
Unsurprisingly, the scheme divides opinion between landlords, lettings agents and business owners - well over half of whom "strongly disagreed" with the proposals during the consultation process - and other residents, who are largely in favour. Presumably because the latter group is numerically dominant, Newham decided to proceed with the plan during a cabinet meeting on 21 June.
The good news is that proactive landlords who run two-bed flats have little to fear. Those who register early will only have to pay £150 per property for five years. And the strings attached to the licence are already best practice. They require landlords to draw up a written tenancy agreement, demand references from tenants, provide a 24-hour emergency contact number, carry out inspections every three months, and so forth. Being a landlord will become even more compliance-heavy than it is already - but the costs should not be too onerous.
The bad news is that landlords who let terraced properties to three or four unrelated tenants - a very common arrangement in London - may have to make substantial alterations to obtain the additional licence, although the precise rules are not yet clear. Landlord Richard Blanco complains he may have to "institutionalise" his "lovely home from home" in Stratford by installing fire doors and extinguishers.
A broader problem is that the scheme may simply not work. It is all too easy to imagine that the decent landlords will register, while the landlords the scheme is designed to root out will simply keep a low profile. The council will then have to spend vast sums on enforcement.
Newham's high-profile mayor Sir Robin Wales says he will stamp out rogue landlords, "whatever it costs". But even if he succeeds, it's not clear why a reduction in antisocial behaviour - which is supposedly at the root of the project - would necessarily follow. After all, it's presumably the tenants who are responsible for the crimes, not their lax landlords. Sir Robin boasts that antisocial behaviour plummeted in Little Ilford, a tiny ward in which it conducted a pilot scheme, after Newham introduced compulsory licensing. But the licensing plan was also accompanied by an intensive police operation, which seems a much more plausible reason for the improvement.
Together with the huge expansion of housing supply in and around the Olympic Park, this licensing scheme makes the Stratford property market one of the most unpredictable in the country. The regeneration story may well get lost in the melee once again.
