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Room Rental Yields Stabilising After Two Years of Significant Increases

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In the past two years, the UK rental market for rooms and house shares has experienced consistent increases. However, recent data shows that these rises are beginning to slow, suggesting a stabilisation that may bring relief to renters. New figures from SpareRoom indicate that room rents increased by 4% on average across the UK in the year leading up to Q3 2024—the smallest year-on-year rise among all rental types.

Regional Trends in Room Rents

Regions like Northern Ireland (+8%), East Anglia (+6%), and the North West (+6%) have recorded the largest average rent increases. Among cities, Southend-on-Sea (+11%) and Dundee (+10%) saw the biggest year-on-year rent hikes, while Warrington was the only area in the UK to see a decrease in average room prices (-2%).

Market Highlights

London rents have decreased for the third quarter in a row. Although the cost per room in the capital has gone down, demand remains high, with an average of 3.67 people applying per room, down from 5.72 in the previous year. This still exceeds the UK average ratio of 3.99, which has also fallen from 6.19.

Outside of London, Edinburgh holds the title for the most expensive city to rent a room, with monthly averages around £920.

Lifeboat Lettings’ Local Insights: Kent’s Market Performance

Closer to home, Lifeboat Lettings has conducted a detailed analysis of rental trends in Kent. By comparing room rents within our portfolio of 50 HMO properties across Ashford, Folkestone, and Dover, we found that average rents increased by just over 6%, from £485 per month in Q3 2023 to £525 in Q3 2024.

To put this in perspective, we also reviewed single-family lets (47 units ranging from 1 to 4 bedrooms) within the same towns. For these properties, average rents rose roughly 7%, from £773 to £825 per month. These findings highlight that while rental rates are still growing, increases in Kent have been more moderate compared to some UK regions.

A Positive Outlook for Landlords and Renters

Overall, the data suggests the UK room rental market is finding balance, which is a positive sign for both landlords and renters. This trend may offer landlords the chance to secure long-term tenants as rental pressures ease.

Are your rents in line with market trends? Contact Lifeboat Lettings today for a free portfolio review. Our team will help you assess whether your rental income is optimised for today’s market.