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London Olympics Could Not Boost Property Rentals Market, Against Market Speculation
Forecasts suggested that the ‘London Olympics 2012’ would enhance the demand in the London lettings market like never before. However, this expectation did not turn into reality.
By: Residential Lettings London
Peter Savage, who represents the City, Docklands and Stratford areas from the Association of Residential Letting Agents (ARLA), said that since most estate agents in London just "jumped" on the short-term lettings blitz, it is difficult to enumerate the extent of the loss suffered due to the number of unregulated agencies. One of the leading residential letting agents in London, and a member of ARLA, also supported this with the data that out of nearly 60 properties of its Canary Wharf luxurious properties, only 29 were occupied by tenants during the games.
Mr. Savage also said, "The consensus was that there was a huge over supply. Many ‘agents’ were not even aware of what was involved in short-term lets as some unregulated agents wouldn't bother with details like permission from the lender (if the landlord has a mortgage), the freeholder or the building society and the council. Another factor is people staying there expect serviced apartments so any short-term gain would be made insignificant by the costs that would be incurred in catering to the short-term tenants (market) and the void periods that would follow afterwards- which is clearly happening now. The demand that was expected never materialised."
An industry source also stated that almost 2,000 properties remained unoccupied during this summer. In fact, most of the lettings agents in London faced a situation where the properties available to rent were far more than the properties actually occupied by tenants. And the numbers lowered further during the Paralympics.
Another factor was the numerous hotel rooms that were also available which appealed more to prospective tenants who were coming for the games. They considered that it was not worth renting a short-stay apartment for only three days when you have to stay for 8-10 days and needed time duration flexibility. The miscalculation was in the expectation of a high demand for upmarket private residential apartments and the hype within the lettings market, misled homeowners into renting out their properties, with a particularly high income expectations.