Property investors in London are finding themselves looking for unoccupied property insurance cover as they suffer from a massive Olympic hangover.
The London Olympics were heralded as not only one of the biggest events ever to have taken place on the planet but also one of the biggest earners residential landlords in London would encounter. With promises of rental achievements double, triple and even more for the summer months in areas close to the Olympic stadium, a number of landlords set about removing their sitting tenants to make way for the Olympic tourists and the pot of gold they promised.
Unfortunately according to agents Chesterton Hughes, not only did the wave of money waving tenants fail to appear but greedy landlords who removed tenants to make way for them are still finding their properties empty and having to bring their rents down to attract new tenants. According to the agents, stock levels have gone up 57% in the third quarter of 2012 on the London market and landlords are under pressure to lower rents to bring in tenants.
Nick Barnes, head of research at Chesterton Hughes, said “The balance of power in the prime London lettings market has shifted subtly in favour of tenants since the second quarter. The Olympics factor has impacted on the market, although not in the way that was anticipated. Instead of boosting demand it had the opposite effect and contributed to the increase in supply as more owners unsuccessfully marketed their properties.”
Overall though landlords across the UK are still achieving better than ever rental returns on their properties and with first time buyers still struggling to get a mortgage there is little likelihood of things changing in the near future.