Inner London’s room rental supply fell five percent year on year in the second quarter of 2026, ending a three-year growth run and raising fresh pressure on renters in the capital, according to new data from SpareRoom.
The flatshare platform said the decline came during the same quarter that phase one of the Renters’ Rights Act took effect. While east London held broadly steady, supply in north-west and south-west London fell by almost 10 percent from a year earlier, leaving some of the capital’s most expensive room markets even tighter.
For landlords, the immediate significance is that room-by-room demand is not disappearing even as affordability is stretched. Supply is tightening fastest where rents are already highest, which points to continued pricing pressure in shared housing and suggests the flatshare market remains one of the clearest stress points in London’s rental system.
East London offers the cheapest rents and most choice
SpareRoom said average room rents in inner London stood at £979 per month in Q2 2026, only 0.3 percent higher than a year earlier. East London remained the cheapest inner-London area at £933 per month and also had more than twice as many rooms available as north London, where the average rent was £937.
At the other end of the scale, west London was the most expensive postcode area at £1,043 per month and had the lowest supply. SpareRoom said that where supply is squeezed most tightly, rents are likely to rise faster.
Matt Hutchison, director at SpareRoom, said the data was a reminder that meaningful relief on housing costs depends on more supply reaching the market, adding that falling supply now appears across the capital rather than in just one or two pockets.
Why the London flatshare market still matters for landlords
Shared housing is often treated as a tenant affordability story, but it is also a signal for landlords watching demand depth. When renters who cannot stretch to self-contained homes keep competing for rooms, it shows how little slack there is lower down the market.
This follows Landlord Knowledge’s recent report on Rightmove’s warning that rental supply had slipped below 2025 levels, which pointed to a wider shortage across the mainstream lettings market. SpareRoom’s latest London figures suggest that the same squeeze is still visible in the room-by-room sector, where affordability pressure tends to appear first and hardest.
There is also a warning here for landlords expecting the new rental regime to cool demand quickly. The Renters’ Rights Act may change process and protections, but it does not create extra stock. That leaves room rents exposed to the same old supply maths, especially in high-cost parts of London.
Landlords tracking where demand may stay strongest can compare the latest figures with Landlord Knowledge’s coverage of RICS data showing rent pressure rising as landlord supply fell again. SpareRoom’s latest dataset is available through SpareRoom’s July 2026 statistics page.
What this means for landlords
- If you let rooms in London: demand pressure still looks strongest where supply has tightened fastest, especially in higher-cost inner boroughs.
- Watch for: further rent movement in postcode areas where supply is falling but annual price growth has not yet caught up.
- If you’re buying: east London’s mix of lower average rents and higher room availability suggests a different risk profile from the tighter west-London market.
- For HMO operators: supply trends matter as much as headline rents when judging void risk and future pricing power.
- Bottom line: London’s flatshare market still points to scarcity, not relief.
Editor’s view
Flatshares are often the canary in the rental market. When even room supply starts shrinking again in inner London, landlords should assume affordability is being stretched harder than the headline rent numbers alone suggest.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 29 July 2026
Sources: SpareRoom
Related reading: Rightmove: rental supply falls below 2025 level as rents hit record
