The UK rental market showed signs of rebalancing at the close of 2024, with rents in London falling for the fourth quarter in a row, according to SpareRoom’s Q4 2024 Rental Index. This marked the steepest drop in London rents since Q1 2021. The average room rent in the capital fell by 2% year-on-year, dropping from £1,015 in Q4 2023 to £993.
SW3 remained London’s most expensive postcode, with an average rent of £1,488, despite a 9% annual decrease. SW1 followed at £1,244, recording a significant 13% year-on-year reduction. Outside London, the most expensive towns for renters included Twickenham (£928), Kingston-upon-Thames (£920), and Epsom (£855). At the other end of the spectrum, Bootle (£447), Barnsley (£465), and Bradford (£473) offered the most affordable options.
Matt Hutchinson, Director at SpareRoom, commented: “The past few years have been incredibly tough for renters, not just in London but across the whole of the UK. With average rents falling in the capital and increases slowing across the country, hopefully, there’s finally some light at the end of the tunnel. However, there’s still a long way to go before we can call rents genuinely affordable.”
Rents stabilise across the UK
The average UK rent increased by just 1% year-on-year, rising from £738 to £774—the smallest annual increase recorded in 2024. Notably, no UK region saw rent increases exceeding 5%, with London being the only area to experience a decline.
The North West recorded the highest growth rate outside London, with rents rising by 5% to an average of £608. East Anglia and the South West followed with 3% increases, reaching £669 and £665, respectively.
Hutchinson added: “This cooling in the market, coupled with the traditional January increase in supply as cash-strapped homeowners take in lodgers, will give renters some confidence that the market is slowly but surely turning itself around.”
Opportunities for landlords
While the rental market cooling offers relief to tenants, it also signals opportunities for landlords to adapt their strategies. London’s rent decreases could attract tenants who previously found the capital unaffordable, potentially increasing demand for well-located properties. Outside London, steady rent growth in regions like the North West highlights the growing appeal of rental markets in less traditional areas.
For landlords, this stabilisation reflects a chance to retain tenants long-term by offering competitive rates while avoiding turnover costs. Additionally, the January influx of new supply may create opportunities for landlords to expand portfolios or attract tenants in areas where demand remains high.
