"2022 was the worst year in recent memory for renters, as supply fell and demand rocketed, creating a wildly imbalanced market. As a result, rents hit new highs and have kept rising in 2023"
- Matt Hutchinson - SpareRoom
A hectic end to 2022 saw record demand for rooms, yet supply was at an all-time low. So it’s no surprise that every region in the UK (plus every major town and city) saw record-high rents this year. UK average room rents exceeded the £800 mark for the first time on record in 2023, with London averages exceeding £1,000 for the first time.
However, the latest figures suggest that renters have reason to be hopeful in 2024. The current ratio of people looking vs the number of rooms available has fallen back to its lowest point in over two years, with 4.3 people for every room available (the highest point was 8.1 in September 2022).
Meanwhile, in the capital, there are 3.8 people for every room available (highest point was 8.8 in September 2022). Additionally, since the worst point in late 2022, demand has fallen and supply has increased slightly. Summer demand levels in 2023 didn’t hit the peaks they did in 2022, and supply was also higher, which is a positive sign for the year ahead.
Both UK and London figures are roughly half where they were a year ago, and average rents in London fell month on month in November for only the second time in almost three years.
The data shows positive signs on the horizon for 2024, but there is a long way to go to rebalance the market and there’s a massive need for more long-term rental properties. According to the English Housing Survey, there are currently around 26 million empty bedrooms in owner-occupied properties in England and Wales alone.
If as little as 1.74% of these empty rooms were rented out to a lodger, it would bring the ratio of renters to rooms back down to the levels seen in 2017.
Matt Hutchinson, Director at SpareRoom, comments: “2022 was the worst year in recent memory for renters, as supply fell and demand rocketed, creating a wildly imbalanced market. As a result, rents hit new highs and have kept rising in 2023.
"But there’s some cause to be optimistic for 2024 as the supply/demand ratios in the UK and London are at their lowest in two years. This will hopefully see an end to renters getting involved in bidding wars, or having to resort to living somewhere that doesn’t tick all their boxes for fear of nowhere else being available.”
