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The proposals for regeneration of the Thames Gateway were launched in July 2003, with ambitious plans for extensive infrastructure improvements to help support the development of 120,000 new homes and the creation of 180,000 jobs by 2016. Analysing recent trends in data on house prices, levels of housebuilding and job creation for each of the 15 local authorities in the Gateway highlights a mixed picture on progress (see attatched PDF below).

How much progress it is reasonable to expect just three years into such a major regeneration project is open to debate. Past experience tells us that it takes years for such schemes to generate any significant critical mass in terms of delivery and outcomes. Much of the current activity in the Thames Gateway is focused on delivering infrastructure and services to meet the needs of future residents and workers.

The data shows a clear difference in activity between those areas already benefiting from previous regeneration initiatives and others that are just starting. The western end of the Gateway has already benefited from more than E E two decades of regeneration centered around Canary Wharf with high levels of housebuilding and job creation. Improved transport infrastructure and rising property values are supporting an eastwards move in regeneration into Stratford, the Lower Lea Valley and the Royal Docks, as well as from Greenwich to Woolwich along the south side of the River Thames. The investment needed for delivering the Olympic Games in 2012 will provide additional impetus for this part of the Thames Gateway.

Further along the Gateway, in the key strategic development areas of London Riverside, Thurrock and North Kent Thameside, there are clear signs of expansion in business numbers. Housing output is also above average, although the actual numbers are still relatively low in the context of the overall targets. The fact that property values have been rising fastest in these areas over the last few years will support improved development activity. However, average values are still around 40% below those in the western parts of the Gateway. This has obvious short-term implications for land values and the ability of developers to fund new housing schemes.

A stated requirement for 35% affordable housing provision across the Gateway, plus contributions to significant infrastructure improvements, as well as flood protection measures, all add to the cost of developing homes in the Gateway. The problem is that current residential values reflect the current supply of housing and infrastructure provision. As infrastructure improvements and large masterplanned developments are delivered in these areas, so we will see the delivery of new housing that will set new pricing points and slowly improve the economics of development.

If the targets for the Gateway are to be met, it is a question of how long the process of regeneration will take to achieve a clear critical mass across what is a large and highly diverse area. Perhaps the greatest challenge will be in attracting sufficient levels of demand for the new housing. With around 65% of all new homes being for owner occupation, it is the skills of the marketing teams working for the developers that will hold the real key to progress by 2016.