Bucking the trend of slating the ‘Olympic Landlord’

The positive side of The Olympics and the  rental market in London

While many landlords and agents have come under fire from the media because of the higher rents they are charging over the Olympic period, bear in mind that without residents offering this facility we would not be able to house all the extra visitors the Games will generate, because our hotels would be filled beyond capacity.

It may seem that some of the properties are expensive, however take an example of a three-bed house in Greenwich sleeping eight people, which is being rented for £11,000 during the Olympic Games period – including the opening and closing ceremonies. So sixteen nights’ accommodation for £85 per person per night, which sounds much more reasonable, especially when you take into account the owners higher risk and depreciation, not to mention the higher demands being made for this type of tenant who is expecting hotel-like service.

Also while these temporary tenants are staying in the community they will be spending money in local shops, cafes, restaurants and bars. This could well be happening in areas that don’t traditionally benefit from tourism.

This is not to excuse the behaviour of property owners who have treated their long-term tenants badly but, as always, this is a minority of people in a sector of the industry that has risen to the challenge of accommodating extra visitors in a creative and flexible way. Most landlords have taken the view that if their long term tenants are settled they will not try to ‘cash in’ on the Olympics, but where their property is naturally available they have tried to maximise their assets.

The role of the Agent is always to find the best (highest) rent that the market will bear for their clients property and while some Agents may have been very bullish about the market it is always easy to criticise this attitude in retrospect. Landlords were expecting high prices, tenants were expecting high prices, no one knew what the supply and demand figures would actually be and so agents had to test the market to ensure they didn’t let property too cheaply. It is worth noting that Estate Agents would have been criticised for this action as they are for charging high rents.

There are many local people who do not fancy trying to live their normal lives with the disruption of the Games going on who will be away for the duration and for them the chance to let out their property allows them to take a comfortable holiday and make a little extra money too.

Anyway with the Games almost upon us perhaps it is time to draw a line under this argument? There are unlikely to be any visitors that have left it this late to rent accommodation.

You can see out other blog on Olympic letting here.

Advertisements

If you live in London and you don’t know your ORN from your TDM then read on.

The infrastructure for the Olympics and Paralympics is nearly complete and so the next greatest challenge is moving people around during the Games.

This is a glossary of the acronyms that are used most frequently around this subject .

ORN – Olympic Route Network

PRN – Paralympic Route Network

TDM – Travel Demand Management

ODA – Olympic Delivery Authority

TfL – Transport For London

Roads affected by the Olympic and Paralympic games.

Map of roads affected by the Olympic and Paralympic games

If you need to get around London during July and August start by looking at this map showing the routes that will be affected http://www.tfl.gov.uk/assets/downloads/corporate/london-2012-olympic-route-network.pdf

For more localised information you can click on the area you are interested in on this map http://www.tfl.gov.uk/corporate/projectsandschemes/22313.aspx

ORN (Olympic Route Network)
This is the group of roads that will be used as official routes for the Olympic vehicles (which will be known as ‘games family vehicles’), between the Olympic Park in Statford and Central London. There will also be routes for use during the Paralympic Games which will be known as PRN.

Roadworks will be suspended on this route during the Games, and there will also be some banned turns, and closed pedestrian crossings, there will also be some Games Lanes which are for use as and when necessary. These will operate in a similar way to bus lanes and like bus lanes you should avoid using them when they are operational or you will be fined.

Businesses facing these routes may have delivery times restricted.

TfL (Transport for London)
Have a section on their site with lots of useful information http://www.tfl.gov.uk/gettingaround/london2012/21677.aspx and they have launched a site called ‘get ahead of the games’ which has useful information about the predicted impact of the increased flow of people on the rail, road and underground network http://www.getaheadofthegames.com. It also has advice on road changes and tips on how best to travel around. Users can put in the postcode of their destination to get further localised information.

TDM (Travel Demand Management)
Travel demand management is aiming to reduce the usual flow of traffic around the City.

Businesses are being given tips on how to help ease congestion by encouraging home working, timing journeys and deliveries to avoid the busiest times, and getting employees to change to walking and cycling rather than driving during the games.

Weddings are being suspended by Newham Council, so that they do not block the roads with ‘unnecessary’ traffic.

They are also asking residents to stock up on essentials to avoid the need for shopping trips, and deliveries.

On-street parking restrictions are being implemented and these are covered further in our blog ‘Street Parking’.

How has the Olympics affected the London rental market?

Image

With around 4 million extra visitors to London over the Olympic period it was forecast that the rental market would explode during the games, the reality has been less inspiring.

Properties that are very luxurious, or have views of one of the venues, or those that offer the chance to stay in central London while visiting the games, have been successfully and profitably let, but the chances of renting out an average family home in the east end of London are looking increasingly less likely as the games draw nearer and landlords are accepting that they are not likely to cash in on the Olympics.

In April this year The Guardian reported one agent who has closed his books on the Olympic lets because he is oversubscribed and another manager of a chain who confesses they had let less than ten of the five hundred Olympic lets on their books.

There have been cases of unscrupulous landlords evicting tenants illegally to take advantage of the higher rents that can be achieved during the Olympics. One case highlighted by the BBC is of Ninna Thorhuge who was given two weeks’ notice to leave. This is not legal and Housing minister Grant Shapps gave a statement to the BBC condemning this behaviour “Landlords should be under no doubt that it is a criminal offence for them to evict a tenant without giving proper notice, and that anyone found guilty of doing this – or of harassing a tenant – could lead to a custodial sentence of up to two years.’

For landlords to act within the law, tenants must be served with a valid notice before they can be evicted, which is usually two months, and then they can only be evicted after a court order has been issued, and a baliffs warrant granted.

Evicting long term tenants is a very short sighted attitude that is unlikely to pay off for landlords. When the mass of people abate after the Olympics, those landlords with long term regular tenants may well feel they have the last laugh as other landlords all try to relet their Olympic lets at the same time.

In many cases the short term gains will be wiped out by the void periods between lets, the expense of adding furniture and fittings and the increased wear and tear likely to property let on this basis.

There were reports of similar property scrambles in Sydney and in in Vancouver after the Olympics in those cities, with parallel tales of disappointed Landlords and disgruntled tenants.

Landlords who are renting their property on a short term let should see our blog on the ‘legalities of renting during the Olympics’.

Is your Olympic let legal?

Many landlords are not aware of the legislation in place affecting those who intend to rent out properties during the Games, we answer the question “What are the legalities of renting during the Olympics?”

It is relatively straightforward for people to rent out rooms in their own homes during the period but if you have a whole property to rent out, proceed with caution. London Councils have different rules regarding renting out self-contained properties.

Contact your local planning department about the rules regarding lets of less than 90 days. Westminster, Kensington & Chelsea and Camden and Tower Hamlets charge £335 for a planning application to change use from Residential to Temporary Sleeping Accommodation. However it appears if you live in Southwark you may not need permission although you should contact them to discuss your plans. Their website states

… the council will not actively be taking enforcement action against those who rent out their homes as a one-off during the Olympics. http://www.southwark.gov.uk/info/100007/housing/2577/renting_out_your_home_during_the_olympics 25/06/2012

If you have a mortgage on your property you will need the permission of the mortgage company to let out your house, and you should make it clear to them that it is a short term let.

You must notify your insurer of your plans or you will not be covered. Landlords should be clear about what their insurers will cover if the property is let on short term lets, as it may not be as comprehensive as when it is owner occupied.

Landlords will need to have a Gas Safe Engineer carry out safety checks on any gas appliances and issue a Gas Safety Certificate. Fixed wiring systems should be checked for safety and any electrical equipment PAT tested to ensure they are safe for a tenants use as this proves due diligence.

Unlike longer term tenancies, where tenants would expect to bring some of their own belongings, properties will need to be fully furnished to the level that would be expected in an hotel, including crockery, kitchen utensils, bedlinen etc. The rent may include the bills as it will not be practical to register tenants for utilities – although it might be practical to read meters and charge accordingly for usage.

Landlords must be aware that they are taking a risk with items that are left in place. Anything valuable should be removed (including any of a sentimental value). It is advisable to take a deposit from tenants against damage, but accidents do happen and sometimes money alone cannot compensate for loss.

Having the money to visit the Games and pay a high level of rent does not guarantee that the tenant will be wholly reliable or responsible either, so treat the transaction as a business arrangement. Be aware of what might go wrong, limit the damage that could be done, and do not get personally involved. It is a good idea to employ an agent to oversee the legal process, compile and check inventories and deal with tenants checking in and out.

You should also be aware that some developments have Head Leases that prevent subletting on a short term basis, and may Assured Shorthold tenancies will not allow the tenant to sub-let. You should check with your Management Company or landlord before making arrangements to let. While Council tenants are not able to sublet their property, and if they are found doing so they may face eviction.

Earnings from renting out property must be declared to the tax office.

Riley Marshall Estate agents are able to give you advice to stay legal if you are considering renting your property in the short term.  Please contact us on info@rileymarshall.co.uk with your question.

Landlords tell your Tenants

If you own property in an area that will be affected by the Olympic and Paralympic Games then you may want to send your tenants this blog page.

Temporary parking restrictions during the Olympics

Now that the Olympics is becoming a concrete structure in our lives – literally and metaphorically – our mind is turning to the practicalities that surround those of us who live and work around the venue sites.

In case you are not aware of what is about to happen to your free on-street parking this guide aims to enlighten and inform.

The Olympic Games start on Friday 27th July until Sunday 12th August, followed by the Paralympic Games from Wednesday 29th August until Friday 9th September.

There will be temporary parking restrictions around the Games Venues to prioritise parking facilities for local residents and businesses, and to prevent spectators from using local on-street parking. Obviously London is going to be most affected by the volume of visitors, but other areas will also have changes to their parking arrangements too.

There are different permit arrangements in different areas and the official 2012 website has a list detailing what they are Click Here.

Most people who live in these areas will have had information about parking changes through their door, but if like me you don’t read all of the community news pamphlets, then you may have noticed some red and white blocks appearing at the end of your street. These will hold signs stating the temporary regulations for parking that will occur during the Olympic and Paralympic period.

The local borough councils are aiming to link up the DVLA records with their Council Tax information to ensure that local residents and business are automatically issued with permits. It is recommended that if you haven’t received these in the next two weeks then you should contact your local authority.

Procedures are in place for those who live in an affected area but whose car is registered elsewhere, (for instance if you have a company car), and in this instance you should contact your local council to register your vehicle. This can be done online.

In addition to these measures London Councils are recommending an increase in illegal parking fines to £200 and will be prioritising towing vehicles that are illegally parked in order to keep the highways as free as possible.

Residents and local businesses are also entitled to visitors parking permits for the duration of the temporary parking. Details of when this will be and how many will be issued is yet to be released.

These changes affect street parking only. Parking in your private driveway will remain unaffected. If you currently live in a controlled parking zone then your permit arrangements will remain unaffected.

It is not yet clear what will happen about house removals in these areas but for up to date information on this we can recommend checking in with ICM Gerson who have a very informative blog about the industry.