A cooling market on paper does not automatically translate into breathing room in practice

A Genuinely Different Trend Line, After Years Of A Much Steeper One

By Lowri Griffiths. After a stretch of double-digit annual rent increases that defined London’s rental market for several genuinely brutal years running, growth has now slowed to somewhere around three to three and a half percent annually, according to recent ONS and industry index data, a meaningfully different trajectory that analysts attribute to a combination of an affordability ceiling simply being reached, more normalised migration patterns, and the arrival of the Renters’ Rights Act earlier this year.

On paper, this represents genuinely good news, the first real evidence that London’s rental market has stopped compounding at the punishing pace that pushed so many renters into flatsharing, longer commutes, or outright departure from the city over the preceding several years.

Why Slower Growth Still Does Not Feel Like Relief

The trouble is that three percent growth on top of an already historically elevated base still means rent continuing to rise faster than most renters’ actual salary growth, meaning the market has stopped getting dramatically worse without yet beginning to get meaningfully better, a distinction that matters enormously in lived experience even when it looks like genuine progress on a chart.

A Personal Assessment From This Year’s Renewal Conversations

Speaking with several friends who renewed tenancies this year, the general sentiment was less relief than weary acknowledgment that the increase, while smaller than in recent years, still outpaced their own pay rises, meaning the gap between income and rent continues widening even as the headline growth rate itself improves.

Cooling Is Not The Same As Cheap

A slower rate of increase is a genuinely meaningful statistical improvement, but it will take several more years of sustained moderation, ideally alongside actual wage growth catching up, before London renters experience anything that feels, in their own monthly budgets, like real financial relief rather than simply a less severe version of the same underlying squeeze. Whether next year’s figures show growth continuing to moderate further, or ticking back upward once current cooling factors fade, will do considerably more to answer the affordability question than this year’s improved but still real increase.

SOURCE: https://prat.uk/