London rents stabilise but remain unaffordable for renters

Despite rents in London stabilising, affordability remains out of reach for many renters, claims SpareRoom.

A report by the flat-share website reveals that although average room rents in the capital have fallen marginally by 0.4% year-on-year to £980 per month, strong and sustained demand is preventing a further decrease.

It’s not just in London where rents have soared, regionally, rents in Wales (2.1%) and South West England (2%) have seen the highest year-on-year increase.

London is unaffordable for the average renter

Despite London room rents averaging £980 per month, £34 less than the record high of £1,014 recorded in Q4 2023, the average rent in the capital is still 26% higher than it was five years ago.

Across London, NW5 (Kentish Town) has seen the highest year-on-year increase, with rents rising 14% to £1,082 per month. South Kensington and Knightsbridge (SW7) remains the most expensive postcode, where the average monthly room rent is £1,748.

According to SpareRoom, 28% of London renters now spend more than half of their take-home pay on rent, while eight in ten spend over 30%.

Matt Hutchinson, director at flatshare site SpareRoom, says renting in the capital has become harder for renters.

He said: “London rents are stable, but not affordable.

“Flatlining is certainly better than rising, but we need to see significant decreases for them to feel in any way comfortable for renters. It’s hard to see that happening at any point in the near future, so the question is, at what point does London simply become unaffordable for the average renter?”

The supply and demand imbalance also continues to affect London with 2.4 people searching per room available to rent.

Won’t see rents drop

Across the UK, rents continue to surge, with Wolverhampton (6.1%), Southend-on-Sea (5.8%), and York (5.5%) recording the biggest increases.

In the West Midlands, three towns have seen the highest year-on-year rent rises: Cannock (20.7%), Stourbridge (17.2%), and Kidderminster (15.7%).

Mr Hutchinson warns that rents are likely to keep rising due to ongoing supply and demand pressures.

He said: “Rents are stabilising, but squeezed renters aren’t feeling anything close to relief. For people to be able to rent in their first-choice areas, and maintain flexibility in the workforce, we need to see rents fall significantly.

“But, as long as high demand and limited supply are the status quo, we won’t see rents drop to levels that people would find genuinely affordable.”

Share This Article