Property Inspector: The truth about the London Olympics
TheMoveChannel.com’s Property Inspector, taking a closer look at global real estate each month.
In April’s podcast, TheMoveChannel.com investigates the curious case of the London Olympics.
With less than 100 days to go until the opening ceremony, lettings agents across the country are getting excited about the chance to cash in on the great rental race. Enquiries are up on one site, searches are surging on another, Sol Campbell has put his home on the market, and all the while rents are tripling in the areas around Stratford.
But with some landlords evicting existing tenants to find others who’ll pay higher prices and agents reporting hundreds of properties on their books with no-one to rent them, what’s actually going on in London’s market? Are people still going for gold or is it a stadium-load of hype? What’s the truth about the London 2012 Olympics?
TheMoveChannel.com tracks down James Davis, CEO of lettings agency Upad to get to the bottom of the mystery.
The London lettings market at the moment is strong, with yields and demand increasing, but there’s something different going on here. This lettings fever has gripped real estate. Upad has launched its own Olympics lettings service – how are you finding the response?
“It’s been really quite encouraging. Despite the majority being based in East London, we’re seeing properties being looked at across the whole of the city.”
Do you find that your clients are existing homeowners looking to get out of London or landlords with existing properties?
“It’s a lot like Wimbledon. There are people who want to be around during the tournament but there are lots of families who find that the burden of having extra tourists in the town over the summer is too much and maybe they want to capitalise on their empty property and make some money in the process.“
A lot of agents apparently have a large number of Olympics properties on their books without many tenants. Has there been over-hype? Are the premium commissions and rates deterring tenants?
“I suppose the warning is for landlords not to be too greedy. There should be a premium attached to the short let but don’t get carried away with what’s being reported in the press. Be modest and not too greedy on the matter.”
A London agent specialising in letting homes for Wimbledon told the Property Inspector that they absolutely did not want or need any extra customers or properties. Is that a situation you’re in?
“I think we’re different. We’re not operating in a local marketplace and we’re advertising hundreds of properties across the UK anyway. If we had a 10 per cent increase in stock because of the Olympics, it wouldn’t affect business too much.”
There have been reports of some landlords in Stratford evicting existing tenants to attract new ones and higher profits. What is your reaction to that?
“If you as an individual or family have a property that you’re considering letting out for the Olympics, I think it’s a great opportunity. But to evict tenants you may have at the moment to potentially – and please note the word potentially – just to earn a significant uplift because of the Olympics? I think that’s a very naive thing to do.
“If a tenant is happy to move out anyway, you’re in a good position, but I strongly don’t think you should change how you currently structure your rental properties just because of the Olympics. We don’t recommend you going down that road.”
The Olympics have arguably distorted the housing market, with rents up by 5 per cent over the past 12 months. After the controversy this week surrounding Newham council’s attempt to re-house its poorest tenants to Stoke-on-Trent because rents are so high, do you think that the London lettings market will return to normal after the summer?
“It’s an interesting one. We’re in a position where those who want to own their own property are unable to – we’ve all seen enough stories in the media about first time buyers. More and more people are being forced into renting, outside of the fact that it’s become more socially acceptable to rent, so for those reasons there are more people coming into the sector. That by itself is putting pressure on the market and raising rents because we simply do not have efficient housing to keep up with demand. There will be an increasing knock-on effect, as far as I can see, for another three to five years.”
Given the hype and buzz surrounding the Olympics, if someone is looking to let their property this summer, what would be your advice?
“The hardest part is pricing your property. Because we haven’t been here before, it’s very hard to say what the mark-up should be. Short let properties have a premium attached to them anyway, but it’s important to be realistic and be careful not to price yourself out of the market.”
Apart from being realistic with rental rates, what other tips would you give?
“Be careful what property you buy and where you buy – don’t look to buy something in East London just because there’s a lot of press coverage at the moment. Ask yourself what happens when everything packs up and goes home.
“To pick up on what you were saying earlier about the number of properties on the market without tenants, position yourself well. Present your property on as many sites as you can and make sure it’s presented in the best possible light; people will not travel down before the Olympics to see it, so include professional photos and floor plans. Make it as easy as possible for someone to move in.”
Listen to the full investigation here.
Notes to Editors
Founded in 1999, TheMoveChannel.com is the leading independent website for international property, with than 400,000 listings in over 100 countries around the world, marketed on behalf of agents, developers and private owners.
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