2023: From a Renter’s Perspective
As 2023 draws to a close, we thought it would be a good opportunity to reflect on the events that shaped the rental market over the past twelve months and a chance to look into what we can expect from the year ahead. Amidst the challenges renters have faced this year, recent data suggests a slowdown in the rental frenzy, meaning a more positive outlook for 2024 (we hope!).
What happened in 2023
After a hectic end to 2022, with huge demand for rooms and supply the lowest we’ve ever seen, it came as no surprise that things continued to heat up in the rental market in 2023.
Every region of the UK, plus all major towns and cities, saw record high rents this year
- UK average room rents exceeded £800 for the first time on record
- London averages exceeded £1,000 for the first time ever
As a result, almost three quarters of renters said they’d either considered moving or were already planning to to escape high rents
Why there are (some) reasons to be optimistic
The good news is that there are definite signs of things slowing down. The ratio of people looking vs the number of rooms available has fallen back to its lowest point in over 2 years (July 2021).
- The UK is currently at 4.3 (high point was 8.1 in September 2022)
- London is at 3.8 (high point was 8.8 in September 2022)
Both the UK and London figures are roughly half as high as they were around a year ago, and average rents in London fell month on month in November for only the second time in almost 3 years.
Also on the positive side, demand has fallen and supply has increased slightly since the worst point in late 2022. Summer demand levels in 2023 didn’t hit the peaks they did in 2022, and supply was also higher.
So, what about 2024?
Although things are looking up, we still have a way to go.
In order to rebalance the market, we still need more supply. According to the English Housing Survey, there are currently around 26 million empty bedrooms in owner-occupied properties in England and Wales alone. If as little as 1.74% of these empty rooms were rented out to a lodger, it would bring the ratio of renters to rooms back down to the level it was before rents started rising, which would (in theory), make a huge difference!