Rental supply in the capital slumps following Renters’ Rights Act

London rental supply has dropped following the introduction of the Renters’ Rights Act, according to new data.

Findings by SpareRoom reveal the priciest postcode area in the capital is west London, where average rents stand at £1,043 per month. The area also currently has the lowest supply of available rooms.

However, the data shows a different picture in east London, where postcodes have both the highest rental supply and some of the cheapest rents in the capital.

Rents will rise faster

According to SpareRoom’s data, in the second quarter of 2026, as the Renters’ Rights Act came into effect, flatshare supply in inner London fell by 5%, ending a three-year period of growth. Supply in north-west and south-west London also fell by almost 10% year on year.

However, the findings show a different trend in other parts of the capital, with rental supply in east London remaining broadly unchanged in the year to Q2 2026.

East and north London are currently the most affordable areas in the capital, with average rents of £933 and £937 per month respectively. But in Q2, east London had more than twice the number of rooms available to rent than north London.

Matt Hutchinson, director at flatshare site SpareRoom, explains: “It’s no coincidence the area of London with the most rooms available also has the cheapest rent. Where supply is most squeezed, rents will rise faster. It’s a good reminder of what needs to happen if renters are to see any meaningful decreases in housing costs.

“The big problem, of course, is that supply is now falling everywhere, it’s just not falling as fast in east London. The new Prime Minister and his cabinet will have their work cut out to deliver cost of living savings in the absence of enough rental supply.”

The news comes as the Office for National Statistics (ONS) reveals average private rents across the UK rose by 3.3% to £1,388 a month in the year to June.