Room rental supply has just entered negative growth in inner London, according to flatshare site SpareRoom.
When supply falls, rent increases are likely to follow. But data also shows east London postcodes have both the highest supply and the cheapest rents in the capital.
In the second quarter of 2026, as the Renters' Rights Act came into effect, flatshare supply in inner London fell 5% year-on-year, ending a three-year growth run that had seen supply rise 27.2% in 2024 and 16.6% in 2023.
Outer London supply held up better, edging up 0.9%, bringing the year-on-year change across Greater London as a whole to -3.4%.
Zoom in on inner London's postcode areas, though, and it's clearly not the same story everywhere. East London rental supply stayed more or less flat in the year to Q2 2026, down just 0.1%, while supply in north-west and south-west London both fell by 9.8% year-on-year. North, south-east and west London also saw declines, of 6%, 1.9% and 4.1% respectively.
East and north London are currently the most affordable areas in the capital, with average rents of £933 and £937 a month respectively. But in Q2, east London had more than twice the number of rooms available to rent than north London. The priciest postcode area is west London, where rents average £1,043 a month, and supply is currently at its lowest in the capital.
Across Greater London as a whole, the average monthly room rent now stands at £915, with inner London rents averaging £979 against £794 in outer London.
"It's no coincidence the area of London with the most rooms available also has the cheapest rent," said Matt Hutchinson, director at flatshare site SpareRoom. "Where supply is most squeezed, rents will rise faster. It's a good reminder of what needs to happen if renters are to see any meaningful decreases in housing costs.
"The big problem, of course, is that supply is now falling everywhere; it's just not falling as fast in east London. The new prime minister and his cabinet will have their work cut out to deliver cost of living savings in the absence of enough rental supply."
