Recession cuts value of Olympic flats by 40 per cent

AT least £300million has been wiped off the projected re-sale value of the taxpayer-funded Olympic village by the recession, insiders have revealed.

Olympic sources say the 2,800 apartment project in Stratford would fetch £500million at today's prices compared with forecasts during the property boom in 2007 of £800million, with a two-bedroom apartment with views over the Olympic Park costing £300,000 instead of £450,000.

The drop of almost 40 per cent underlines the risk to the project as extra taxpayers' cash is pumped in during the credit crunch. The Olympic Delivery Authority stresses that it expects prices to improve before the flats are brought to market in 2015.

"No one can predict what the value of flats will be when they are sold off," an ODA spokesman said, adding: "We are confident they will be an asset."

The credit crunch has already taken its toll on the Olympic village project, which last month had to be given a £326million funding injection by ministers. The ODA is confident it can secure backing and equity from Australian developer LendLease. It has until the end of next month to find the funds.