Letting agents in the capital are already warning those with landlord insurance policies that they may have a battle on their hands finding new tenants in September.
With it having been a historic year for the UK, and in particular London, it has been revealed that many landlords in the city have managed to get four and five times the average rental values due to increased demand. Demand in the capital has historically outweighed demand in the rest of the UK, even during the economic downfall. However, with many opting to go with the short term letting option to bring in the cash, industry insiders are forecasting a glut of properties coming onto the market in September with the likelihood of a drop in rental achievements.
Graham Kinnear, Managing Director of Landlord Assist, a company who offer a multitude of services to property investors, said “There is a strong risk that there will be a sudden surge in the supply of properties available on the market…Landlords have been benefiting from the vast opportunities for high value, short-term lets…and, as expected, there has been a very brisk letting market in the area around the Olympic Village.”
He went on to pledge his concern regarding vacant properties: “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 6 to 12 months to reach a more stable equilibrium.”
Of course with many councils in London desperately looking for accommodation for some of its council tenants it may well be that the solution to their problem may also help landlords get their properties back into occupation quicker than some experts anticipate.