London agents and landlords look to cash in on Olympics, leaving tenants facing rent hikes
Tenants in London are being priced out of their homes because their landlords are hiking up their rent during the Olympics and Paralympics.
Properties are being advertised for rent for as much as £100,000 a week over the Olympic period in some well-heeled parts of west London, while tenants closer to the Games sites are finding their rents increasing up to fourfold.
One tenant living in east London said a clause had been added to his rental contract last year that said there would be “a minimum increase of 4.0x multiple of the current weekly rent during the Olympics and 2.0x multiple of current weekly rent during the Paralympics”.
“There was no mention of it [the increase] outside of the clause being added,” he said. “I am going to have to move out.”
Another tenant, who also did not wish to be named, said that his landlord had just informed him that his rent would go up by almost £200 a month – an increase that has forced him out of London, increasing his travel costs by 15%.
“My flat is in Bermondsey [south east London] and when it came to my renewal of contract last month, our landlord insisted on an increase in rent from £1,100 to £1,290 a month,” he said. “As I’m only 24 and only left university two years ago an increase like this is impossible, and has resulted in me having find a new place outside of London increasing my commute by about an hour.”
“The only reason I could see for this steep increase was the Olympics and the fact that I’m close to the Jubilee [tube] line, and a few stops from Stratford. I’m pretty sure I’m not the only one in this boat as I have seen three or four other tenants in our building moving out in the last three months, most of whom are young professionals.”
Lettings agents, Draker, which is based in London’s West End, is advertising Olympic lets prominently on Google. A search on its website shows 36 properties to rent during the Games, with rental prices ranging from £1,500 a week for a one-bedroom flat in Chelsea to £100,000 a week for a six-bedroom penthouse apartment in Knightsbridge.
A number of other high profile estate agents have sections dedicated to Olympic properties on their websites. Foxtons is renting out 1,100 properties for the Olympics, with prices ranging from £525 a week to £100,000 a week.
Dozens of other websites have been created especially for property owners wanting to cash in on the Games.
One property owner on Rentduringthegames.com is advertising a two bedroom flat for up to six people in a tower block on “well known Ilford high road”, east London, for £1,500 a week during the Olympics and £1,000 a week during the Paralympics. The average rent for all properties in the area at present is £1,195 a month, according to property website Zoopla.
Housing charity Shelter said that it has become increasingly concerned that tenants are being priced out of their homes.
“We’re beginning to see worrying signs of the pressure-cooker effect the Games could bring including some indications of landlords looking to evict their current tenants in order to let their homes to Olympic visitors this summer,” said Kay Boycott, director of campaigns, policy and communications at Shelter. “It’s absolutely vital that anyone who thinks they could have problems seeks advice immediately.”
Labour MP Chris Williamson also raised the issue in Parliament at the end of last year after attending a public meeting in Brent, north-west London, where a number of tenants had expressed their concern over their tenancy agreements during the Games.
“One of the concerns raised at that meeting was that longstanding private tenants were being told by their landlords that they will have to move out during the Olympics,” said Williamson. “I raised this in Parliament, asking whether an assessment had been made as to the extent of the problem and whether the CLG minister planned to take steps to discourage this practice.”
Communities and Local Government minster Andrew Stunell replied saying that the government has received no evidence that this was happening.
WA Ellis, an estate agent in central London that deals with high-end properties said that it was receiving inquiries “in their droves” about lettings over the Olympic period but that 90% of these were coming from landlords, with very limited demand from tenants.
“The major drawback [to increasing rents during the Olympics] is the void period running up to the let and more importantly, following the let,” said Lucy Morton, senior partner and head of lettings at W A Ellis. “If long term investors jump on the Olympic bandwagon and launch their properties back on to the market in September, there is a strong risk that there will be a sudden surge in supply of properties available without the demand.”
However, other agents are looking to take advantage of the Games. Fulham based estate agency, Haus Properties, said that it will be hosting a series of informative Olympic rental seminars throughout March and April “to educate homeowners about what they need to consider.” It said that this was due to an increasing volume of enquiries from homeowners looking to let their properties during the Olympics.
The National Landlords Association said that while it recognised that the Olympics presents an opportune time for many businesses to increase their income, it does not make sound commercial sense for landlords to end a current tenancy to raise the rent for a few weeks during the games.
“Most landlords would recognise it is far more beneficial to have a good, long-term tenant in their property,” said David Salusbury, chairman of the NLA. “It is important that homeowners considering letting their properties during the Olympics are aware of their responsibilities to tenants, and the regulations they must comply with.”