Rents in the capital are heading downwards, with decreases seen every single quarter this year. This news, revealed by flatshare website SpareRoom, could be a sign that the once red-hot London rental market is finally starting to cool off.

However, it’s not yet a national trend, as rents across the UK are still climbing – just at a slower pace than before.

London Leading The Way in Rent Slowdown

While other parts of the country are still seeing increases, London is bucking the trend with rents dropping in several areas. Only East Central London has seen a rise, with rents in this area shooting up by 4%. Meanwhile:

• North London rents remain unchanged
• West London rents remain unchanged
• South West London rents have dipped by -1%

But, it’s important to note that overall, London rents are still up by 1% compared to this time last year.

Where Are Rents Falling Fastest?

The biggest drops have hit some of London’s priciest postcodes, suggesting that even the wealthy are tightening their belts:

• W8, Holland Park: Down a whopping 11%
• N2, East Finchley: Also down 11%
• SW7, South Kensington/Knightsbridge: Down 7%
• SW3, Chelsea: Also down 7%

Bargain Hunters Look To These London Boroughs

Despite the overall dip, London rents are still notoriously high. But there are still some relative bargains to be found:

• E4, Chingford: Offering the cheapest rooms at an average of £777 per month
• E6, East Ham: A close second at £778 per month
• E7, Forest Gate: A snip at £785 per month

What Does This Mean For Landlords?

Matt Hutchinson, the director at SpareRoom, says this could be the start of a new era for London’s rental market: “Although rents are still rising throughout the UK, the rate of growth is slowing, and the London market in particular is showing signs of stabilising, especially when it comes to the supply:demand ratio.”

However, he also warned that there’s still a way to go before London becomes truly affordable for renters: “While this is an encouraging start, there’s still a long way to go for London renters when it comes to accessibility and affordability.”

Outside London – Edinburgh Takes The Crown

For those looking to invest outside of the capital, Edinburgh is now officially the most expensive city to rent a room in, with an average price of £920 per month.