The number of short-term lets available in London’s Olympic boroughs of Barking and Dagenham, Greenwich, Hackney, Newham, Tower Hamlets and Waltham Forest rose 35% over Q1. Non-Olympic boroughs only saw a 19% rise in the number of property and bedrooms available to let over the same period, meaning the Olympic effect has caused a 16 percentage point difference in short-term let numbers.
While this shows homeowners across the whole of London are keen to cash in on demand from Olympic tourists looking for a cheaper alternative to hotels, it is those close to the key sites that are most eager to rent out their spare rooms and properties.
In a signal that the Olympics is beginning to have an impact on rental prices, average weekly rents across Olympic boroughs rose over Q1 while average rents in non-Olympic boroughs fell. Average weekly rents in Olympic boroughs now stand at £143, 14% higher than in Q4 2011. Conversely, average weekly rents in non-Olympic boroughs fell 4% over the same period suggesting there is not enough demand to prevent the increase in supply of short-term lets having a negative impact on rental prices.
Jonathan Moore, director of Easyroommate.co.uk, comments: "As the finishing touches are put on the Olympic venues and London begins the countdown proper to the opening ceremony, it seems the capital’s homeowners are making their own preparations. A number of estate agents have made overblown claims of homeowners able to command up to 300% rental premiums over the games but the evidence proves this is nonsense. Demand for rooms and properties in Olympic boroughs is already beginning to push up average rents and the closer we get to the Olympic flame being lit the more demand we expect to see and the higher we anticipate rents to rise. However, the sorts of premiums some have claimed to be possible haven’t yet materialized and still look very wide of the mark.”
Of the ten boroughs across London which have seen the highest rise in average short-term rental prices over the last quarter, four are Olympic boroughs. These include Waltham Forest where average weekly rents have risen 54%, Newham where rents have grown 24%, Hackney where average prices are up 7% and Greenwich where weekly rental rates are 5% higher than Q4 2011.
In Tower Hamlets rents have remained flat quarter-on-quarter, while Barking and Dagenham is the only Olympic borough to see average rents fall (down 10%). This may be due it being the Olympic borough with the highest growth in the number of rental properties available over the quarter (68%) leaving supply out-weighing demand for the moment.
Jonathan Moore, continued: “It’s clear that demand for accommodation near the Olympic venues is high. This is reflected in rising average rental prices in these areas while prices are falling in others, particularly London’s prime locations. Average weekly rents in Kensington and Chelsea and Westminster are down 28% and 19% respectively over the last quarter – a large fly in the ointment for those trying to talk-up the possible rental premiums across London as a whole. We may well see average short-term rents across London rising as we get closer to the games, however, for the moment, it is those with the Olympics on their doorstep who are seeing the benefits of renting out their property or spare room.”
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