The pandemic has undoubtedly shaken the market for buying and selling, with national house prices on the rise with no signs of slowing just yet.
The rental market across London, however, has been somewhat different, with rents dropping over the last few months and demand down year-on-year in Q2 2021, according to new figures released by SpareRoom.
Its latest Quarterly Rental Index provides a comprehensive overview of how the room rental market is performing across the country, based on over 400,000 room listings.
Here at PIT, we take a closer look at the findings below…
The highs and lows of London rental demand
The analysis from the flatsharing site revealed that West Central and West London saw the biggest drops in room rents across the city, both down 4% when comparing Q2 2021 with Q2 2020.
This is closely followed by East Central, North and the South West – all down 3% year-on-year. In the capital, average rents fell by 2% from £724 in Q2 2020 to £708 in Q2 2021.
The biggest drops were recorded in Chelsea (SW3), down 15%, Earls Court/West Brompton (SW5), down 11% and Dulwich (SE21), also down 11%.
Meanwhile, Balham (SW12), Winchmore Hill (N21) and Upper Edmonton (N18) saw the biggest increases, up 7%, 6% and 5% respectively.
This negative trend in the capital continues to pull down national room rents, but when excluded from the rest of the UK, average rents across the country are actually up 1%.
However, SpareRoom notes a surge in interest across London, with demand vs supply up 71% year-on-year across the city. While West Central London may have seen the biggest regional drops in rent, it also experienced the biggest increase in demand vs supply (up 191% year-on-year), followed by East Central (up 133%) and the South West (up 98%).
How does the rest of the UK fare in comparison?
Across all UK regions, East Midlands, South West, Wales and Yorkshire & Humberside saw the biggest increase in room rents, all up 3%.
In fact, the only regions outside London where rents fell were Northern Ireland (2%) and West Midlands (1%).
Within the UK’s 50 largest towns and cities, Birmingham experienced a significant decrease in rents (6%), followed by Middlesbrough (3%), whilst Dundee and Peterborough saw the biggest increases, both up 9% year-on-year.
Looking at the demand vs supply of the UK’s 50 largest towns and cities, Brighton experienced the biggest increase, up 101% year-on-year, followed by Poole and Edinburgh, both increasing by 81%.
Matt Hutchinson, SpareRoom director, comments: “Our latest data shows rents in London falling year on year yet again, a trend that began with the start of the pandemic and has persisted ever since as people looked beyond life in the capital.”
“However, unlike the same quarter last year, we’re now seeing demand for London rooms rentals outpacing supply. As more and more of us are vaccinated and industries like entertainment and the arts slowly starting to re-open, we can expect more people to return to our cities. That may mean the trend in negative rents begins to flatten and perhaps even reverse over the coming months."