The average rent for a room in London has decreased this quarter, says SpareRoom.co.uk

London rents have dropped the fastest in the UK this year – with City rents dropping a huge 19% – however, this trend is likely to reverse as demand from tenants increases, says research from SpareRoom.co.uk.

A decline in demand for rooms has forced landlords to reduce rents in a bid to entice tenants – SpareRoom’s Rental Index for the second quarter of the year cites the decrease in the number of overseas flatfinders as a major factor in the price drops.

According to the flat-finding site’s research, falling immigration numbers has resulted in 25% less overseas flat-finders, who have been deterred by the weak pound and unfavourable jobs market.

Average London rent prices fell 1.7% in the second quarter – annually, they fell 2.6% – and typical rent for a room in the capital dropped from £554 to £544 per month.

Matt Hutchinson, Director of Research at SpareRoom.co.uk, said: “London rents have taken a serious blow in the past year, making it an ideal time for tenants on the hunt for a bargain. The financial crisis has claimed countless City high-fliers and falling demand has seen rents in the borough plunge. Other wealthy boroughs such as Westminster and Richmond upon Thames have also been badly hit in the past 12 months.

“There’s been a huge increase in supply over the past 12 months, which has forced down rents. Existing flatshares have been renting out additional rooms to save money and the number of households taking in a lodger has also grown dramatically.”

However, SpareRoom.co.uk has warned that the drop in prices is only temporary. The number of people looking to flat-share is on the increase, with the number of seekers per room rising to 2.4 last month [June], up from 1.9 in April and 2.0 in May.

The Rental Index analysed 45,000 separate rental listings across the capital.

If you’re looking to find a flatshare or a housemate, visit SpareRoom.co.uk.