Homerton and Shoreditch – both in the borough of Hackney - have seen average property prices rise by 69% and 53% respectively, significantly above the Greater London average of 36%.

There has, however, been a mixed performance in property prices with Stratford, the home of the Olympic Stadium, seeing only a 3% increase in average prices, slower than any of the other postal districts.

Suren Thiru, housing economist, Lloyds TSB, commented: "Some areas close to the Olympic Park have experienced a sharp rise in property prices since London's successful bid to host the 2012 Olympic and Paralympic Games.

"Part of this rise is likely to have been due to an increased interest in property in these locations from both buyers and investors as a result of the associated regeneration taking place. The picture, however, is mixed.

"Looking forward, property prices across East London are likely to receive a boost from the legacy of improved infrastructure and transport links left by the London 2012".

Key findings

  •   Average prices in the fourteen postal districts located close to the Olympic Park have risen by over a quarter (26%) since July 2005. This exceeded the average rise of 20% across England, but was below the London average of 36%.

  •   Four out of the 14 postal districts near Olympic Park saw house prices rise by more than the average for London (36%).

  •   House prices in the Olympic Park areas have bounced back strongly from the downturn in the housing market, rising by 13% between April 2009 and April 2010. This was almost three times the average rise across England (5%), but slightly lower than the London average (16%).

  •   The average house price among the postal districts near Olympic Park is £262,953.

  •   The least expensive postal district is Plaistow with an average house price of £196,426, followed by East Ham (£203,500) and Leyton (£209,769).

There were 14,800 loans (worth £1.8 billion) advanced to first-time buyers in May, up from 14,500 (worth £1.7 billion) in April and 13,700 (worth 1.5 billion) in May 2009. Their characteristics have changed little in recent months. In May they borrowed an average of 3.14 times their income and 75% of the value of their property but interest payments accounted for only 13.2% of their income, the lowest amount since the 13% of March 2004.

The numbers of home movers increased as well in May. The 27,100 loans (worth £4.2 billion) were up from 26,500 (worth £4.1 billion) in April and 22,800 (worth £3.2 billion) in May 2009.

The characteristics of these borrowers have also barely changed recently, says the report, but they continue to benefit the most from low interest rates with interest payments accounting for only 9.5% of their income in May, the lowest percentage in thirty-five years of available data.

CML director general Michael Coogan commented: "House purchase lending continues its recovery but positive comparisons with equivalent months a year ago look unlikely to continue".

Activity picked up in the second half of 2009 due to the stamp duty holiday but with the government's austerity drive picking up momentum we are unlikely to see a repeat of those buoyant numbers this year. Our forecast for gross lending in 2010 may now be looking a little optimistic."

This is broadly consistent with the latest numbers from the Nationwide Building Society which indicated that prices rose by more that 4% between the first and second quarters of the year.

Significantly, the net price expectation balance for Scotland suggests that this robust trend will persist over the coming months with seventeen percent more chartered surveyors expecting prices to rise than fall over the next three months. This is the highest rise recorded in the UK.

Newly agreed sales also turned positive with twenty percent more chartered surveyors reporting a rise compared with minus six percent in May. The sales expectation net balance remains positive; however it did drop in June from thirty-four percent to sixteen percent which is the lowest number recorded since November 2009. This, coupled with the flatter trend in new buyer enquiries, dropping from twelve to three percent, suggests that transitional activity is likely to stabilise during the second half of the year.

"With fewer people choosing to put their homes on the market", said RICS spokesperson, Sarah Speirs, "the demand supply dynamic has resulted in an increase in price expectations and we expect to see this trend continue over the next couple of months.

"The fall out from the budget, lack of liquidity in the mortgage market and looming public sector cuts have resulted in a lack of supply with June recording the lowest figure in new buyer enquiries for twenty-two months. This would suggest that transitional activity is likely to stabilise during the second half of the year".