Date Published 27 July 2012
Landlord Assist, the nationwide tenant referencing firm is warning landlords in London that they risk facing potentially substantial void periods and the possibility of rent falls following the Olympics.
Many landlords have cashed in on the earning potential of the London 2012 Olympic Games, with some visitors paying up to five and six times the normal rate to secure the best properties in close proximity to Olympic venues.
But Graham Kinnear, Managing Director at Landlord Assist is warning landlords that following the Olympics many will be left with no choice but to reduce their rental prices as they are forced to compete for new tenants when properties return to the market in September.
He says: `There is a strong risk that there will be a sudden surge in the supply of properties available on the market after the Olympics but without the same demand.
`Landlords have been benefiting from the vast opportunities for high value, short-term lets during the Olympic Games and, as expected, there has been a very brisk letting market in the area around the Olympic village. We are however concerned that following the event the rental market in London will be swamped with vacant properties, leaving landlords with no choice but to reduce rents as they try to find replacement tenants and avoid having a void period on their hands.`
`The effect this could have on the local market could be for rents to fall sharply as landlords compete for the available tenants. In our experience this could take around six to 12 months to reach a more stable equilibrium.`
Landlord Assist also believes that landlords, who specifically acquired properties in 2005 when London was announced as the host city of the 2012 Olympics, may also look to immediately dispose of their properties following the Games. Similarly, sale prices are also likely to fall as a result of oversupply.
Stephen Parry, Commercial Director at Landlord Assist says: `With so many properties set to return to the market at the same time, we urge landlords to carefully consider their strategy following the Olympics. This is a very unusual situation given the current position in the rental market where letting agents are reporting unprecedented demand and an acute shortage of available rental property.`