In light of a challenging year with escalating rents and limited housing options, industry experts foresee a more positive outlook for renters in 2024. Data from housing specialists indicates a potential recovery in the 2024 rental market, with the ratio of individuals seeking rooms compared to the available rooms hitting its lowest point in over two years.
Positive Signs for Renters in 2024
The rental market, which witnessed record-high rents in 2023, with the average room rent surpassing £800 and London exceeding £1,000, is showing signs of improvement. Experts note that the challenging imbalance between demand and supply in 2022 contributed to the surge in rents, creating a highly competitive market for renters.
Experts highlighted the difficulties faced by renters in 2022, describing it as the "worst year in recent memory." However, there is optimism for the 2024 rental market, as the supply/demand ratios in the UK and London have reached their lowest levels in two years. This shift is expected to reduce instances of renters engaging in bidding wars or settling for less-than-ideal housing options due to limited availability.
Reasons for Optimism
Housing specialists' data suggests several reasons for optimism in the coming year. The current ratio of people seeking rooms versus the available rooms has significantly decreased, standing at 4.3 (down from 8.1 in September 2022). In London, this ratio is 3.8 (down from 8.8 in September 2022). Since the peak demand in late 2022, there has been a decline in demand, accompanied by a slight increase in supply.
While the figures for both the UK and London are approximately half of what they were a year ago, the average rents in London experienced a monthly decrease in November for only the second time in almost three years. While these positive signs suggest a more balanced 2024 rental market, experts emphasise the need for additional long-term rental properties.
Challenges and Potential Solutions
Despite the positive trends, challenges persist in rebalancing the market. Experts point out the necessity for more long-term rental properties to address the ongoing housing imbalance. According to the English Housing Survey, there are currently around 26 million empty bedrooms in owner-occupied properties in England and Wales. If just 1.74% of these empty rooms were made available for rent, it could bring the renter-to-room ratio back to the levels observed in 2017, providing a more sustainable and accessible housing market for renters.
