Cost of renting a room in London sees biggest fall since the pandemic

The cost of renting a room in London saw the biggest monthly fall since the start of the pandemic in February, according to new figures.  

Tenants have faced soaring costs in recent years amid high demand and a 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 dropped from an average of £1,024 in January this year to £1,009 the following month.

Tenants have faced soaring costs in recent years amid high demand and a low supply of available properties

It is the first time the monthly cost has been as low as this since July last year. And it is the biggest drop in the cost of renting a room since the start of the pandemic.

The last time there was such a large drop was in March 2020, just as lockdown kicked in, with a month on month drop of £36.

The financial easing in the cost of renting brings tenants some much needed financial relief following the ‘dizzy heights of last summer’ when competition for rental homes was fierce.

SpareRoom said that while the quarterly data will be released in a few weeks, February’s drop suggests that ‘this could be an early sign that things are calming’ in the rental market.

It went on to add, however, that the drop is mostly driven by the number of people looking for rooms. This is opposed to the number of rooms available falling.

SpareRoom said there were as many as nine tenants per room to 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 climbed substantially since the start of 2020 after a lull early in the pandemic was followed by a sharp rise 

SpareRoom explained there are fewer people looking as well as more rooms on the market.

Matt Hutchinson, of SpareRoom, said: ‘Since the summer of 2022, London rents have rocketed as post-pandemic demand soared and supply failed to keep up.

‘However, the number of people looking per room available is falling, which means that rents, although still ridiculously high, have started to follow suit. 

‘Average London rents in February saw the biggest drop in a single month since the start of the pandemic.’

Experts suggested that the rental market seemed ‘calmer’ compared to the ‘dizzy heights’ of last summer

He added: ‘It’s probably wishful thinking to presume rents will fall as fast as they rose, that never seems to happen. 

‘However, this could be an early sign that the market is rebalancing, after the most turbulent period we’ve seen in the 20 years we’ve been running SpareRoom.’

And he went on to suggest that the trend could soon filter through to the rest of the country.

‘So far, rents across the UK haven’t come down in the same way, but it’s likely that this is the start of a ripple effect that will spread over the coming months, unless demand shoots up again,’ he said.

‘Millions of renters across the country will certainly be hoping the worst is now over.’

SpareRoom said there were as many as nine people on average looking per room to rent in September 2022 compared to the current average of four people

Some lettings agents agreed that the rental market seemed ‘calmer’ compared to the ‘dizzy heights’ of last summer.

Harriet Scanlan, of Richmond estate agents Antony Roberts, said: ‘The letting market continues to expand, offering tenants more choice. We are thrilled to see an influx of landlords inviting us to value their properties for lettings in recent weeks.

‘Despite the increase in stock on the market, landlords are still reaping the benefits of a thriving market. Void periods remain minimal, reflecting sustained demand for rental properties.

‘That said, we have moved on from the dizzy heights of last summer. Tenants have more choice, can take their time and be more considered. 

‘We have not experienced a drop in rents as such, but we are carrying out more viewings 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 climb, reaching £1,027 in September last year and then £1,030 in October 2023.

This post first appeared on Dailymail.co.uk