Higher, Faster, More Expensive – Olympic Surge in London Rents

Posted on February 23, 2012

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The 2012 Olympics are about to hit London, bringing over 11 million spectators, competitors, and media delegates. The cost of the Olympics has already been hitting hard, with increased council taxes, transport disruption, and expensive ticket prices making many Londoners feel disaffected with the event.

However, according to recent surveys, one in three enterprising Londoners is planning to make some money during the Olympics by renting some or all of their property. The Government’s Rent a Room scheme has seen enquiries skyrocket, while several London boroughs have taken on new inspectors to deal with the upsurge in private and professional landlords applying for permission to offer short term lets.

Nevertheless, the increasing supply of rental property isn’t sufficient to cater for the spike in demand. The cost of houses to rent and buy in London, particularly at the luxury and professional ends of the market, is continuing to rise as landlords anticipate an Olympic dividend, pricing many young professionals out of the market. The already overheated luxury end of the market is further stoked by investors from the unstable Arabic countries and the weaker areas of the Eurozone choosing to offshore their assets by placing them in the London housing market.

There are still pockets of affordability, particularly away from the Olympic venues in Bow, Stratford, and Greenwich. For example, A two bedroom flat in Stratford, the centre of the Olympic development, is currently costing on average £1,347 pcm, whereas in the neighbouring E12 postcode, a similar property will cost just £978 pcm.

The Olympic competitions run from the end of July until the 12th of August. The Olympic bubble is unlikely to last beyond then end of summer. What will happen to rental prices after that date is anyone’s guess:  will London’s rental market go through a gentle cool down or experience a sudden cramp?

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