Rental market shows signs of recovery in 2024 – SpareRoom

After a year of soaring rents and scarce rooms, flat share website SpareRoom has offered its data pointing to a more positive outlook for renters in 2024.

The firm says that the rental market may be on the verge of recovery, as the ratio of people looking for rooms versus the number of rooms available has dropped to its lowest point in more than two years.

In 2023, rents reached new highs across the UK, with the average room rent surpassing £800 for the first time on record, and London’s average room rent exceeding £1,000 for the first time.

This was the result of a hectic end to 2022, when demand for rooms was at an all-time high, while supply was at an all-time low.

Every region in the UK, as well as every major town and city, experienced record high rents this year.

‘Worst year in recent memory for renters’

SpareRoom director, Matt Hutchinson, said: “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.”

He adds: “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.”

Renters have reason to be hopeful

SpareRoom’s data suggests that renters have reason to be hopeful next year as the current ratio of people looking for rooms versus the number of rooms available has fallen to 4.3 (down from 8.1 in September 2022).

In London, the ratio is 3.8 (down from 8.8 in September 2022).

Also, since the worst point in late 2022, demand has decreased, and supply has increased slightly.

Summer demand levels in 2023 did not reach the peaks they did in 2022, and supply was also higher.

Figures are roughly half where they were a year ago

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 is a 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.

SpareRoom says that 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.

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