Rented home supply in London begins to improve

The supply of homes to rent in London is improving, two leading firms in the sector say.

Flat share platform SpareRoom says that the ratio of tenants looking for somewhere to live has fallen, year-on-year.

It adds 5.6 active renters were looking for rooms last month – down from 6.2 in July last year.

For London, the ratio last month was 4.9, and for last year it was 6 and demand around the country is still outstripping supply.

However, rents are continuing to rise though the number of room adverts grew by 20.8% last month.

‘Demand is still outweighing supply across the UK’

SpareRoom director, Matt Hutchinson, said: “Whilst demand is still outweighing supply across the UK, summer is always a busy time in the rental market and these increases are to be expected.

“The monthly data for July 2023 paints a different picture. Although demand from renters is rising, there are substantially more rooms available than there were a year ago, meaning competition for those rooms is less fierce.

“Our hope is that, as we head into the peak of the market in September, it means we’ll see a better balance than we did in 2022.”

He added: “We know from surveying renters that many people are choosing to stay put to avoid rent increases.

“This could partly explain the slight stabilisation, or maybe people are simply giving up on London entirely thanks to rocketing rents, which would explain the London figures.

“There’s still a very long way to go before the rental market is fully recovered, but compared to where we were this time last year, things seem to be improving.”

Rental homes supply in London improves

SpareRoom isn’t the only outlet flagging up an increase in rental home supply, Chestertons’ latest data also shows that London’s rental market has seen an increase in homes on offer.

It says there were 39% more rental properties on the market last month, compared to July last year, while the number of new tenants entering the market fell by 5%.

With more properties to choose from and slightly less competition, the letting agents say that tenants often now have the upper hand during price negotiations.

As a result of this shift in power, Chestertons says, 88% more landlords than this time last year are willing to reduce their asking rent to secure the right tenant for their property.

‘London was suffering from a severe lack of rental properties’

The firm’s Richard Davies said: “Earlier in the year, London was suffering from a severe lack of rental properties.

“However, with the sales market proving challenging, many would-be sellers have decided to put their property up for rent rather than sell.

“This has temporarily boosted the number of rental properties and prevented rents from continuing the double-digit increases that we have witnessed since 2021.”

Areas of London that have been in particularly high demand with tenants in July include St John’s Wood, South Kensington, Islington, Canary Wharf, Hampstead, Clapham and Fulham.

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