Room rents stall as supply slows

Room rents across the country have barely shifted over the past year, with the average now at £747 per month in the first three months of the year.

According to flatshare platform SpareRoom, the national average rent rose by just 0.1% from £746.

When London is removed from the sample, rents have edged up slightly more, reaching £668, a 0.5% annual rise.

However, the firm is warning that reducing supply could see room rents rocketing.

‘Calm before the storm’

Matt Hutchinson, a director at the firm, said: “Landlords have been telling us of their plans to quit the market or reduce their portfolios for many months but, until now, we’ve not seen that reflected in supply, which has been trending upwards since the aftermath of the pandemic.

“Slowing room supply growth is of huge concern when rooms in flatshares are such a critical source of affordable housing.”

He added: “If the supply-demand imbalance gets any worse, UK rents – which, although stable are already hugely inflated due to post-pandemic demand – will start to rise again.

“We’re concerned this may be the calm before the storm.”

Where rents rose

SpareRoom says the South West recorded the largest increase in room rents at 1.5%, taking average rents to £677.

Wales followed with a 0.8% rise, while the North West saw a 0.5% uptick.

In contrast, London slipped back by 0.5% to £978, and Scotland fell 0.4% to £673.

Some cities are seeing bigger movements with Carlisle posting an 8% rise to £565, Inverness increased 7% to £667, and Gloucester reached £624 after a 6% uplift.

Elsewhere, the gap between higher and lower priced areas remains wide outside inner London.

Twickenham averages £902 per month, Kingston upon Thames £884 and Esher £855.

Meanwhile, Stockton-on-Tees stands at £459, Burnley at £469 and Middlesbrough at £472.

Falling room supply

Listing data points to a shift in supply and in January, usually the busiest month for new flatshare listings, room ads placed by landlords and agents rose by 4.2% compared with a year earlier.

A year before that, the increase had been 13.8%.

The slowdown lands just ahead of the Renters’ Rights Act coming into force from 1 May.

That’s likely to see landlords and agents implementing changes to their portfolios in recent months.