BACKGROUND: Neighbourhood characteristics may affect mental health and well-being, but longitudinal evidence is limited. We examined the effect of relocating to East Village (the former London 2012 Olympic Athletes' Village), repurposed to encourage healthy active living, on mental health and well-being. METHODS: 1278 adults seeking different housing tenures in East village were recruited and examined during 2013-2015. 877 (69%) were followed-up after 2  years; 50% had moved to East Village. Analysis examined change in objective measures of the built environment, neighbourhood perceptions (scored from low to high; quality -12 to 12, safety -10 to 10 units), self-reported mental health (depression and anxiety) and well-being (life satisfaction, life being worthwhile and happiness) among East Village participants compared with controls who did not move to East Village. Follow-up measures were regressed on baseline for each outcome with group status as a binary variable, adjusted for age, sex, ethnicity, housing tenure and household clustering (random effect). RESULTS: Participants who moved to East Village lived closer to their nearest park (528 m, 95% CI 482 to 575 m), in more walkable areas, and had better access to public transport, compared with controls. Living in East Village was associated with marked improvements in neighbourhood perceptions (quality 5.0, 95% CI 4.5 to 5.4 units; safety 3.4, 95% CI 2.9 to 3.9 units), but there was no overall effect on mental health and well-being outcomes. CONCLUSION: Despite large improvements in the built environment, there was no evidence that moving to East Village improved mental health and well-being. Changes in the built environment alone are insufficient to improve mental health and well-being.