The price of renting a room in London has dropped for two months in a row for the first time since February 2021, says SpareRoom.
As of December 2023, the average London room rent was £1,019 — a sign that the situation for tenants could improve this year.
However, in January 2023 the average room for rent on Spareroom cost £952 a month, so rents are still seven per cent higher year-on-year.
Rents in the capital broke the £1,000-a-month ceiling back in August last year, peaking at £1,030 in October 2023.
But two months of back-to-back drops in rents being advertised on SpareRoom — where tenants search for housemates to split the cost of their homes — could mean the trend of rapidly escalating rents could finally be reversing.
"Things are starting to turn around"
SpareRoom also reported that the number of tenants competing for rooms has halved, down to a ration of four renters to rooms versus nine per room in September 2022
"The picture has been incredibly bleak for renters," said the director of SpareRoom, Matt Hutchinson."Our hope is that this slight cooling in the market, coupled with the traditional January increase in supply as cash strapped homeowners take inlodgers, will mean things are starting to turn around," added Hutchinson.
According to the Office for National Statistics (ONS), 2023 saw private rental prices rise almost seven per cent, the biggest annual hike in rent since its records began.
Average London room rents on SpareRoom in 2023
January |
£952 |
February |
£962 |
March |
£963 |
April |
£965 |
May |
£985 |
June |
£982 |
July |
£995 |
August |
£1,013 |
September |
£1,027 |
October |
£1,030 |
November |
£1,026 |
December |
£1,019 |
Londoners spent a record-breaking £32.1 billion on rent in 2023, according to research from Hamptons — the same as the value of all the homes sold in the capital that year.
Zoopla calculated that tenants were spending more than 40 per cent of their income on rent, while forecasting that rents could go up another two per cent in 2024.
Savills said London has hit its "affordability ceiling", but has predicted that rents in the city could go up by another five per cent this year before they level out.
Desperation to get out of rental accommodation is fueling an increase of first-time buyers in the capital, as mortgage rates reduce to a more manageable level.
Along with landlords passing their own increased mortgage costs on to tenants, a lack of supply in rental properties compared to a post lockdown increase in demand fueled the race to hike rents
"We have a housing crisis, not a hotel room crisis"
Another part of the problem is properties being rented out as holiday lets on platforms such as Airbnb.
"The worrying fact is that the current tax system incentivises people to offer short term holiday lets over residential lets, which is ridiculous," said Hutchison.
"We have a housing crisis, not a hotel room crisis," he said.
"The simplest thing government could do in the upcoming budget is to level the playing field, to make renting to long term tenants a more attractive option.”
So far, government intervention with London's rental crisis has been thin on the ground. The ban on no-fault evictions promised in the Renters Reform Bill has been delayed, and Shelter warns that 300 renters in London are served a Section 21 notice each week.
"My landlord blocked me then evicted me"
As evictions soar, people risk homelessness as they search for another home to rent, and often see their former rental re-advertised with higher asking rents.
Precious Adesina, who was renting a studio flat in Wood Green, was one victim of a no-fault eviction after her landlord put her rent up from £950 to £1,100 a month.
"After claiming that rent increases are normal, sending me a few emojis, which included a thumbs up, smiley faces and the prayer sign, and calling me “mate,” they [the landlord] blocked me. The next time I left my home, a dreaded Section 21 notice, was placed in front of my door," she wrote for Homes & Property.
"I've since seen my former home advertised (with outdated photos and a misleading reference to garden access) for £1,400pcm."
