The cost of renting a room in London experienced the biggest monthly drop since the start of the pandemic in February, according to new figures.
Renters have faced rising costs in recent years amid high demand and low supply of available properties.
This is particularly the case in London, where rents tend to be higher than the rest of the country.
However, exclusive figures from SpareRoom suggest the cost of renting a room in Greater London has fallen from an average of £1,024 in January this year to £1,009 the following month.
Renters have faced rising costs in recent years amid high demand and low supply of available properties.
It is the first time that the monthly cost has been this low since July of last year. And it is the largest drop in the cost of renting a room since the start of the pandemic.
The last time there was such a big drop was in March 2020, just as lockdown began, with a monthly drop of £36.
The financial relaxation in the cost of rent provides tenants with much-needed financial relief after the “dizzying heights of last summer”, when competition for rental accommodation was fierce.
| July 23 | £995 |
| Aug-23 | £1,013 |
| September 23 | £1,027 |
| October 23 | £1,030 |
| 23-Nov | £1,026 |
| 23-Dec | £1,019 |
| January 24 | £1,024 |
| January 24 | £1,009 |
| Source: Spare Room |
SpareRoom said that while quarterly data will be released in a few weeks, February’s drop suggests “this could be an early sign that things are calming down” in the rental market.
However, he added that the drop is mainly due to the number of people looking for rooms. This opposes a decrease in the number of available rooms.
SpareRoom said there were up to nine tenants per room for rent at the height of the imbalance in September 2022, compared to the current average of four people.
These figures have been rounded up from 8.8 and 3.5 respectively and reflect Greater London.
The average cost of renting a room has risen substantially since the beginning of 2020 after a lull early in the pandemic was followed by a sharp rise.
SpareRoom explained that there are fewer people looking and more rooms on the market.
Matt Hutchinson, of SpareRoom, said: “Since summer 2022, rents in London have soared as post-pandemic demand soared and supply failed to keep pace.
‘However, the number of people looking for every available room is decreasing, meaning that rents, although still ridiculously high, have started to follow suit.
“Average rents in London in February saw the biggest drop in a single month since the start of the pandemic.”
Experts suggested the rental market appeared “calmer” compared to the “dizzying heights” of last summer.
He added: “It’s probably wishful thinking to assume that rents will fall as fast as they rose, but that never seems to happen.”
“However, this could be an early sign that the market is rebalancing, after the most turbulent period we have seen in the 20 years we have run SpareRoom.”
And he went on to suggest that the trend could soon spread to the rest of the country.
“So far, rents across the UK have not fallen in the same way, but this is likely to be the start of a domino effect that will spread over the coming months unless demand soars again,” he said. .
“No doubt millions of renters across the country will hope the worst is behind us.”
SpareRoom said there were an average of nine people looking per room to rent in September 2022, compared to the current average of four people.
Some real estate agents agreed that the rental market seemed “calmer” compared to the “dizzying” ones of last summer.
Harriet Scanlan, of Richmond estate agency Antony Roberts, said: ‘The rental market continues to expand, offering tenants more choice. We have been delighted to see an influx of landlords inviting us to value their rental properties in recent weeks.
We are carrying out more visits per property and the market seems calmer
‘Despite rising stock on the market, homeowners continue to reap the benefits of a thriving market. Blackout periods remain minimal, reflecting sustained demand for rental properties.
“That said, we have surpassed the dizzying heights of last summer. Renters have more options, can take their time and be more considerate.
“We have not experienced a drop in rents per se, but we are carrying out more visits per property and the market seems calmer.”
SpareRoom said the average monthly cost of renting a room in Greater London was £995 in July last year, before rising to £1,013 the following month.
The figures continued to rise, reaching £1,027 in September last year and then £1,030 in October 2023.
