Shocking new research by flatshare site SpareRoom.com shows average London room rents in 2021 were the lowest they’ve been in seven years, bringing to light the impact the pandemic has had on the capital’s rental market.
The average room rent in 2021 was £721 per month, compared to £766 in 2019, pre-pandemic. The city hasn’t seen rents this low since 2014 when they were £687.
The new data shows the more central areas of London were hit hardest, while areas further out of the city saw the biggest increases. This is, in part, due to people not wanting or needing to live so centrally in the middle of a pandemic.
Central postcodes SW1 (-20%), WC1 (-16%) and EC1 (-15%) saw the biggest rental drops, while the biggest increases were seen in E4, SE20 and SE7, all up 7%.
Since the pandemic began, Q1 2021 was when London room rents hit rock bottom, at an average of £706 per month. But despite this severe drop, the capital is turning a corner – in Q4 2021 room rents were £768 (compared to 2021’s average of £721) and demand vs supply was up across the city.
The London regions that experienced the biggest increase in demand vs supply when comparing 2021 with 2019 are East Central, West Central and East, up 93%, 69% and 54% respectively. This skyrockets when comparing 2021 with 2020, with West Central up a massive 231% and East Central up 192%.
Less room for improvement
Although the London rental market suffered during the pandemic, it’s a different story across the rest of the UK. Excluding London (-6%) and West Midlands (0%), all UK regions saw an increase in room rents when comparing 2021 with 2019. Northern Ireland, South West England and Scotland saw the biggest increases, up 9%, 8% and 8% respectively.
Out of the 50 biggest towns and cities in the UK, Glasgow has experienced the biggest rent increase, up 24%, largely as a result of the COP26 event in November 2021. During this time there was an increase in new ads in the Glasgow area, in particular ads for large properties on short lets with very high rent. This also explains why Paisley, a town not far from Glasgow and home to the city’s airport, became the second most expensive city in the UK in 2021, with average room rents at £673.
Matt Hutchinson (pictured), SpareRoom director comments: “We knew the pandemic had a dramatic impact on room rents in London, but we were shocked to see just how far they fell. 2021 saw the lowest rents in the capital since 2014. Yet our data shows a very different picture beyond the capital, with rents across other UK regions stable or on the up. The last two years have had a huge impact on our lives and have led most of us to question what’s important, including where we want to live.
We saw a huge surge in demand towards the end of 2021, as people started to return to work and restrictions eased. Although Omicron has slowed momentum, early data suggests the capital is starting to regain its appeal. Time will tell how long it takes to regain its pre-pandemic status, but the signs are there that things are turning around.”