NEW: Shocking lack of rental supply now dogging the ‘spare room’ market too

Demand for shared rooms is at an all-time high, while supply has hit a nine-year low, according to flat share site SpareRoom.

The shocking figures have also led to average monthly room rents reaching record highs and increasing across every UK region in Q3 2022; Scotland is up 20%, Northern Ireland up 16% and London up 18% where tenants are now forking out £857 a month.

Its poll also revealed that 40% of renters have had to pay over the advertised price for their room, rising to 47% for London renters, with 37% ending up in a bidding war.

SpareRoom says it found 94% of landlords have no confidence in the government’s approach to housing, making it no surprise that 36% plan to reduce their portfolio this year and a further 16% plan to leave the rental market by the end of the year, reducing supply even further.

It points the finger at Section 24, which stopped landlords claiming tax relief on their mortgage interest, alongside a 3% stamp duty surcharge for second properties which has also made it harder for many smaller landlords to make ends meet.

Real worry

SpareRoom director Matt Hutchinson (pictured) says he’s never seen the market like this. “The spike in demand will ease over time, but the real worry is the continued drop in supply. Landlords are leaving the market in alarming numbers and renters are facing an incredibly tough time,” he adds.

“One silver lining is that homeowners are starting to look at renting out their spare rooms to make a little extra cash and help with the cost-of-living crisis. That could provide much-needed supply far quicker than anything government can do and will bring rents down, while helping struggling homeowners too.”