"Although demand from renters is rising, there are substantially more rooms available than there were a year ago, meaning competition for those rooms is less fierce."
- Matt Hutchinson, director at SpareRoom
Despite rising rental costs, the ratio of people searching for a room compared to rooms available has reduced since July 2022. SpareRoom believes this is a sign of slight stabilisation in the supply and demand imbalance that has characterised the last two years.
Last month, the ratio of active renters compared to rooms available in the UK was 5.6. In London, it was 4.9 which is a 1.1 decrease since last year. Overall, the number of active renters in London has fallen by 0.2% year-on-year, while the number of live room ads has increased by 20.8%. Looking at the UK more broadly, the number of active renters seeking a room has risen by 7.5% which corresponds to a 19.5% surge in the number of room ads.
In July, there was a 14.2% increase month-on-month in the number of inactive renters across the UK compared to a 5.5% increase in the number of live room ads. This means demand is still outstripping supply month-on-month but the year-on-year imbalance has steadied.
Commenting on these findings, Matt Hutchinson, director at SpareRoom, has said:
“Whilst demand is still outweighing supply across the UK, summer is always a busy time in the rental market and these increases are to be expected. The monthly data for July 2023 paints a different picture. Although demand from renters is rising, there are substantially more rooms available than there were a year ago, meaning competition for those rooms is less fierce. Our hope is that, as we head into the peak of the market in September, it means we’ll see a better balance than we did in 2022.”
Hutchinson continued: “We know from surveying renters that many people are choosing to stay put to avoid rent increases. This could partly explain the slight stabilisation, or maybe people are simply giving up on London entirely thanks to rocketing rents, which would explain the London figures. There’s still a very long way to go before the rental market is fully recovered, but compared to where we were this time last year, things seem to be improving.”
