London Rents Soar Past $1,000 Mark Amid Landlord Exodus Following New Regulations

The average cost of renting a room in London's central boroughs has risen above $1,000, according to data from flatshare platform SpareRoom. This surge occurs months after the implementation of Labour's Renters' Rights Act.

The typical tenant now faces a four-figure monthly rent for a room in the capital, a situation exacerbated by landlords reportedly leaving the housing market. SpareRoom data indicates a 7.3% decrease in advertised rooms compared to the previous year.

Labour's Renters' Rights Act, which took effect in May, introduced protections such as an end to 'no-fault' evictions, caps on rent increases, and a ban on fixed-term tenancies, aiming to empower tenants. However, the new data suggests landlords are reacting to these rules by reducing supply, driving prices up. The average cost of renting a room in inner London increased from $990 in the third quarter of last year to $1,002 in the same period of 2026. This marks the first time the average has exceeded $1,000 since a peak in 2023.

Matt Hutchinson of SpareRoom commented that the Renters' Rights Act has prompted some landlords to exit the market, feeling the investment is no longer worthwhile due to compliance efforts. He noted that despite affordable housing being a political priority, the outlook for improvement appears dim without acknowledgment of these issues.

Meanwhile, rents in outer London saw a slight decrease, averaging $800, down from $802. The overall average cost of living in a flatshare across Britain has reached a record high of $769 per month.

A spokesperson for the Ministry of Housing stated that the Renters' Rights Act protects tenants from excessive rent increases by limiting rises to once a year, giving tenants powers to challenge above-market increases, and banning rental bidding wars. The ministry asserts there is no evidence of an exodus of landlords since the reforms were announced and that the private rented sector has remained broadly stable since 2013-14.

Data from September indicated that the average rent price for an entire property in the capital reached a record $2,791 per month in the second quarter of the year, a 2% increase from the previous quarter. Rents outside London also rose by 1.9% to a monthly average of $1,397.

One tenant, Laura Meyer, shared her difficulties in finding an affordable one-bedroom flat in southwest London since the act came into force. She described estate agents referring to the current market as the craziest they have seen in 30 years, attributing it to both the summer season and the Renters' Rights Act. Meyer noted that properties are listed at the highest price points, making it challenging for renters to have offers accepted, as landlords hold out for maximum price offers.

Meyer is currently paying $1,200 a month to share a flat in Parsons Green and has adjusted her expectations, realizing the minimum she might have to pay for a one-bedroom flat is now around $2,000, a significant increase from her initial target of $1,600.