London 2012 Olympics: What it Means for Tenants
April 3, 2012
The countdown begins; there are now only 115 days left until the start of the London 2012 Olympic Games. Some people are excited and have been since London was announced as the host city back in July 2005; others are yet to get caught up in the buzz.
Our lettings consultants are in a prime position to judge the mood of Londoners. They always ask why somebody is looking to move in or out of one of our properties, and recently they have noticed that the Olympics is an increasingly quoted factor when deciding where to live.
They have found that tenants are split broadly into five groups, with rent levels and transport implications being their major concerns. Here are the categories Londoners are falling into:
- Housing: those who want to continue living where they are, but are worried that their current rent will be increased dramatically
- Housing: those who would, in other circumstances, be looking to move but are staying put as some agents are advertising properties at a substantially increased rent elsewhere
- Housing: new tenants that have moved to rent through Young London at market rent as their former landlord was increasing their rent to ‘Olympic Rates’
- Transport: those who are moving out of an ‘Olympic’ area because they do not want to deal with the travel complications affecting their closest stations
- Excitement: a percentage of current tenants are excited to be at the heart of it and are enjoying the buzz of the Olympics
Whilst it’s difficult to pigeonhole Londoners, from our experience the above offers an insight to Olympic sentiment in the Capital. Below our consultants talk us through those points a little further – please feel free to add your own experiences or opinions in the comment section, below.
Speaking to many tenants over the last few months, I have noticed that most have mixed views on what the Olympics will bring. While most of the population are excited by the prospect of being at the heart of one of the biggest sporting events ever to come to the city, others do not feel as optimistic about it. The tenants I have spoken to believe that the price of everything is going to increase, including their rent. However, although we have reassured those with any concerns that this will not happen, some tenants still believe that the cost of other expenses may rise in the capital and as a result, have decided not to renew their contract in locations such as Canary Wharf, and have started their search for properties in other locations.
Tom came to our office the other day desperately looking for an apartment in E14 area, ideally in the Landmark. I asked him where he is renting and why he is moving out. He explained that he already lives in the Landmark, but that his private Landlord wants to significantly increase the rent because of the Olympics. The landlord is certain that he will achieve a 25% rental increase, but as we are all beginning to see the demand is not necessarily there. There is a good chance the landlord will not get the flat let at that price, that he will struggle to find a new tenant and the resulting void period will negate any income enhancement brought by the higher rent that he’s chasing. The happy news is that we managed to find Tom a new apartment in the same development (with a better view) at the rent he is currently paying, and assured him that there will be no rental increase within the first 12 months.
A similar story occurred with a lady who, like Tom, was renting directly through the landlord and not using an agency. Again we found her a new home that met her requirements and it is her landlord, who has not received the advice of an agency, who will suffer. Our Asset Managers have managed the expectations of our landlords regarding the Olympics, as they know that high asking prices will not necessarily be met. (David Mackenzie, Young London’s Director of Asset Management, explores this issue, and other practicalities and pitfalls of trying to ‘cash in’ on Olympic rentals).
Over the past few months I have spoken to many tenants who are not renewing their rental contract this year. The Olympics has been a major factor – those who live in areas that are likely to be affected the most seem willing to move if it means their commute to work won’t take as long. One tenant, Joanna, has lived in Canary Wharf for 3 years, commuting each day to West London where she works as an accountant. Although she likes living in Canary Wharf and has a relatively easy journey to work via the Jubilee Line, the reality of living in the area during the Olympics has seen her search for a new flat – one that would allow her to walk to work.
Instead of regaling tales, I thought I would end with a few tips for tenants regarding the Olympics.
- Logistics – if you are planning on moving during the Olympics this may be very difficult as councils are not issuing short stay permits and the roads will be jammed so delivery drivers may not be able to deliver (pun intended)
- Renew or Extend your tenancy – if you do not wish to commit to another 12 or 18 month term look to extend your tenancy just beyond the Olympic period
- Vacate earlier – if your tenancy expires during the Games and you plan to move, speak to your landlord or letting agent to see if there’s any flexibility to do so before the opening ceremony
- Flat share – many are worried that rents will increase, so you could consider taking a larger property (2 bed instead of 1 bed) to spread the cost of living either with a partner, spouse or friend.