The UK rental market is showing early signs of stabilisation as the rapid rise in room rental yields begins to slow.
New data from SpareRoom reveals that while UK average rents rose by 4% in Q3 2024, this is the smallest year-on-year increase recorded this year, signalling a potential cooldown in the previously surging market.
In regional terms, Northern Ireland has seen the sharpest rise, with room rents increasing by 8%, followed by East Anglia and the North West, both experiencing 6% rises. Among UK cities and towns, Southend-on-Sea led with an 11% increase, while Dundee saw a 10% rise. Warrington, however, was the only location to record a year-on-year decrease, with average rents dropping by 2%.
London’s rental market continues to experience unique dynamics. While rents have decreased for the third straight quarter, the demand-supply ratio remains high, with 3.67 people competing for each room, down from a peak of 5.72 earlier in the year. Across the UK, the demand ratio has also dropped, from 6.19 to 3.99, suggesting a slight easing in competition for rental spaces. Edinburgh remains the most expensive city outside London, with an average room rent of £920 per month.
SpareRoom’s Director, Matt Hutchinson, comments: “Although rents are still creeping up overall, we’re starting to see signs that things are slowing down, particularly when it comes to the number of people chasing every room on the market. That’s positive news, but there’s a long, long way to go before rents will feel genuinely affordable.”
The data offers a glimmer of hope for renters, as rental costs begin to stabilise following two years of steep increases. While the market is still not fully rebalanced, the reduced pace of rent growth and the drop in demand per available room are positive signs that could eventually lead to more manageable rents in key areas across the UK.
