The cost of renting a room in London has fallen the most since the pandemic

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

Renters have faced rising costs in recent years due to high demand and a low supply of available housing.

This is especially the case in London, where rents tend to be higher than the rest of the country.

However, exclusive figures from SpareRoom reveal that 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.

It is the first time since July last year that monthly costs have been so low. And it’s the biggest drop in the cost of renting a room since the pandemic began.

The last time there was such a big drop was in March 2020, just as the lockdown came into effect, with a month-on-month drop of £36. The average at the start of 2020 (for January that year) was £800.

The more recent financial easing of rental costs is bringing much-needed financial relief to renters after the “dizzying heights of last summer,” when competition for rental properties was fierce.

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

However, it added that the decline is mainly driven by the number of people looking for rooms. This is in contrast to the decrease in the number of available rooms.

SpareRoom said that at the height of the imbalance in September 2022, there were as many as nine tenants per room to rent, 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 significantly since the start of 2020, after a lull at the start of the pandemic was followed by a sharp increase

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 skyrocketed as demand soared post-pandemic and supply failed to keep pace.

‘However, the number of people looking for each available room is falling, which means that rents, although still ridiculously high, have followed suit.

‘Average rents in London saw their biggest fall in a single month in February 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 imagine that rents will fall as quickly as they have risen, but that never seems to happen.

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

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

“So far, rents in the UK have not fallen in the same way, but it is likely that this is the start of a ripple effect that will spread over the coming months unless demand soars again,” he said.

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

SpareRoom said it was averaging as many as nine people per room to rent in September 2022, up from the current average of four people

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

Harriet Scanlan, from estate agency Antony Roberts in Richmond, said: ‘The rental market continues to grow, giving renters more choice. We are very pleased with the influx of landlords who have invited us to value their properties for rental in recent weeks.

‘Despite the increase in stock on the market, landlords are still reaping the benefits of a booming market. Vacancy periods remain minimal, due to the continued demand for rental properties.

“That said, we have gone beyond the dizzying heights of last summer. Tenants have more choice, can take their time and are better considered.

‘We have not experienced a rent drop per se, but we are doing 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 rise, reaching £1,027 in September last year and then £1,030 in October 2023.