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Olympic housing crunch: London landlords evict tenants to gouge tourists
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02/02/2012 09:12 AM
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LONDON -- Landlords in Britain's capital are evicting tenants so they can cash in on this summer's Olympic Games by charging tourists many times the usual rent.
Homes in the east London boroughs where many events are to be held are fetching between five and 15 times their typical rates as properties are rebranded as short-term "Olympic lets." Some landlords are also enforcing expensive "penalty" clauses for tenants who want to remain during the gathering of the world's top athletes.
Rent controls are almost non-existent in Britain and some Londoners told msnbc.com that the looming increase in housing costs will leave them with no choice but to leave the city for the summer.
While the Olympic Village will house some 22,000 athletes along with 6,000 coaches and officials, countless tourists, athletes' families, journalists and sponsors will be left to jostle with 7.8 million residents for places to sleep. The accommodation crunch is expected to be so severe that some residents are planning to rent out their backyards to campers during the Games – which begin July 27.
"We're [seeing] landlords beginning to evict their tenants," Antonia Bance, head of campaigns for housing charity Shelter, told msnbc.com. "Lots of letting agents are writing clauses into contracts being signed saying you can live here with the exception of this period [during the Olympics]."
Those who are evicted or displaced by huge rent increases – as well as other tenants looking to move in July and August – will struggle to find affordable alternatives due to the temporary influx of tourists paying higher rates, experts say.
"It's all to do with supply and demand, and there's a shortage of stock," Matthew Martin, Greater London area lettings director for real estate agency Your-Move, told msnbc.com.
As the summer approaches, he said, "there are going to be opportunists ... people are going to pay an extortionate amount."
'I don't think it's right'
Shelter's Bance described the case of a couple in the Newham area who will be renting out the three-bedroom house they own in a former public housing project for 15,000 pounds ($23,600) for three weeks. The average rental price of a three-bedroom property in the borough is 1,189 pounds ($1,870) per month.
In the Dalston neighborhood, one-bedroom apartments that normally fetch around 300 pounds ($475) per week are now being advertised at 1,625 pounds ($2,575) per week.
And in Kentish Town, which is a 25-minute train journey from the new Olympic Stadium, a five-bedroom home is being advertised at 10,000 pounds ($15,845) per week during the Games.
It is difficult to know how many Londoners will be priced out of the city as landlords woo Olympic visitors, but interviews with property experts, real estate agents, tenants, prospective landlords and tourism-industry specialists suggest it will not be an isolated problem.
Joanna Doniger, owner of private rental company Tennis London, which finds short-term lets for players at the Wimbledon tournament, opened a new division of the company called Accommodate London last year after being bombarded with hundreds of calls from homeowners hoping to rent out their properties during the Olympics.
Doniger said she has been disappointed to discover that many prospective clients are actually investor-landlords who are kicking out their long-term tenants.
"I've had to take them into the corridor and say, 'What's this about?'" she said. "I just don't think it's right."
One of those who agrees with Doniger is David Brown. The 25-year-old moved into the top three floors of an old rowhouse above a shop in Whitechapel, east London, with four other people last October.
It took him two months to find something he could afford – he and two university friends had to search for two other housemates online before anything was in their price range.
[link to worldnews.msnbc.msn.com]
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