It is no news that the rental room in London market has been erratic during the last four years. We thought we would provide you with a summary of the flatshare market’s situation at the end of 2024 and share our predictions for the upcoming year to assist you in comprehending it.
The entire market collapsed in 2020 as a result of individuals being unable to relocate and landlords being eager to fill vacant spaces. As pent-up demand returned to the market after the pandemic, we witnessed a massive spike in the number of people looking for accommodations.
The number of rooms available looked like this:
The 2020 jump, significant decline, and subsequent steady rise are all readily seen.
In terms of the quantity of individuals seeking accommodation, the situation looked like this:
Before things started to slow down this autumn, there was a noticeable decline at the beginning of 2020, followed by a tremendous high in the fall of 2022 and another in 2023. We had a record amount of renters at any one moment during the 2022 boom.
What does all that mean, though? Is the market once more “normal”?
It is difficult to tell. It is difficult to define what normal (or a “new normal”) should look like because supply and demand in the market have always changed. Furthermore, the number of available rooms has been steadily declining in recent years as a result of modifications to the taxation of landlords.
One method for figuring out the purpose of the supply/demand ratio is to examine the average number of inquiries a roomsinlondon ad receives, as is the case with many real estate websites. Nevertheless, it is not always true. It may seem as though 50 individuals are vying for each room if there are 50 double rooms for rent in London advertisements in a given region and 50 people seeking rooms, but that is not always the case.
At oomsinlondon, we calculate the ratio of searchers to rooms by dividing the number of persons looking for rooms by the number of live rooms offered for advertising. This gives us a more accurate figure.
This is how that appears:
For comparison, in September 2022, the renters-to-rooms ratio was 8.1 in the UK and 8.8 in London. By October of this year, it had dropped to 3.4 in the UK and 3.7 in London.
The data indicates that the ratio is important, not the actual quantity of rooms or renters at any particular time. In 2022, the number of people in the market relative to the number of available single rooms was the true problem, not the number of people in the market.
Rents must be declining if the ratio is declining, correct?
This year, average rents in all of the main cities and towns in the United Kingdom reached all-time highs. This is due to several issues, one of which is that since the Autumn 2022 Liz Truss/Kwasi Kwarteng mini budget, costs have increased, especially interest rates and, consequently, mortgage rates.