Supply and demand levels fall after post-pandemic surge

The imbalance of supply and demand is returning to normal after five years of soaring levels.

According to SpareRoom, supply and demand levels are now beginning to fall back to pre-pandemic levels.

The flat-share website suggests this drop could signal a positive start for the property market next year.

People moving post-pandemic

The data from SpareRoom compares the number of live adverts to people searching for a room. Current figures show that the national supply and demand ratio stands at 3.02 to 1, while in London, the ratio is lower at 2.65 to 1.

This compares to pre-pandemic statistics from January 2019, which showed a supply and demand ratio of 2.44 to 1 nationally and 2.22 to 1 in London.

The most significant gap between supply and demand since 2019 occurred in September 2022, when a surge in people looking to move post-pandemic caused the ratio to become wildly unbalanced. At that time, demand outpaced supply 8.82 to 1 in London and 8.13 to 1 nationally.

While supply and demand in September and October this year remained above 3 to 1, November figures have shown a reassuring decrease, dropping from 3.67 to 2.65 in London and from 4 to 3.02 nationally.

Very gradually been rebalancing

Matt Hutchinson, SpareRoom director, said: “After peaking in September 2022, rental supply and demand has very gradually been rebalancing. The latest figures show that the ratio is back to pre-pandemic levels which is a promising sign for 2025 if the numbers continue to decrease as they have.

“Hopefully, this is another strong indicator of the market stabilising, as rental increases also begin to slow, particularly in London.”