It appears as though the rental market in the capital is stabilising
Ask anyone who’s rented a property or a room in London recently and they’ll tell you how laborious and expensive an undertaking it is. Rents well upwards of £800 a month are the norm, but realistically more with bills included, and the quality of places available is variable, to put it lightly.
According to a SpareRoom Rental Index report released in November, it looks like the London rental market is levelling off. The data shows that though London rents were up 1% on those from Q3 2023, they have been dropping for every quarter of 2024 so far, and rental prices increases in the capital are happening at a slower rate. In some areas, average rental prices have been continually falling since the end of 2023, with the biggest drops in W8 (Holland Park), N2 (East Finchley), SW7 (South Kensington / Knightsbridge) and SW3 (Chelsea) – however, decreases in the average prices certainly doesn’t mean that Holland Park or Knightsbridge can now be considered affordable.
So where are the most affordable places to rent in London?
SpareRoom reports that average monthly room rents in E (£961), N (£939) and SE (£947) postcodes are the cheapest in London, with E4 (Chingford), E6 (East Ham), E7 (Forest Gate), SE12 (Lee) and SE9 (Eltham) all averaging under £800 per month for a room.
If you’re looking to get on the property ladder, the cheapest places to buy in London include Thamesmead, Barking & Dagenham, Croydon and Bexley.
Zoopla reports that though rental inflation in the UK has slowed to 5.4%, the lowest rate in three years, and that the number of rental properties available is rising, demand still outstrips supply and is still double the level that it was pre-pandemic. The increase from 3% to 5% in stamp duty on second homes and buy-to-let homes announced in the Autumn Budget by the Chancellor could well put a further squeeze on the number of rental properties available.
As Matt Hutchinson, Director at SpareRoom, states, “Although rents are still rising throughout the UK, the rate of growth is slowing, and the London market in particular is showing signs of stabilising, especially when it comes to the supply:demand ratio. While this is an encouraging start, there’s still a long way to go for London renters when it comes to accessibility and affordability.”
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