Flatshare rental supply across the UK has entered negative growth, falling 3.2% in the year to Q2 2026, while room rents have hit record highs in six of the country's nine regions, according to data from flatshare platform SpareRoom. The figures coincide with the quarter in which the Renters' Rights Act came into effect.
The decline is not confined to landlords directly affected by the legislation. Rooms advertised by live-in landlords renting to lodgers in their own homes have also fallen, dropping 1.7% in the year to Q2. In Greater London, lodger room supply fell 2.6% over the same period. Numbers have been broadly flat for two years.
Lodger landlords account for 24% of all UK flatshare supply. SpareRoom's data shows lodger room ads were in growth after the Rent a Room scheme's tax-free threshold was last raised in April 2016, peaking in Q3 2018. Supply fell sharply during the Covid-19 pandemic and has not recovered to pre-pandemic levels since.
SpareRoom is calling on the Chancellor to raise the Rent a Room scheme threshold from its current level to £11,000 per year ahead of the Budget. The campaign also calls for the scheme's terms to be tightened by introducing a 31-day minimum stay requirement, which would close the loophole that currently allows holiday let operators to access the tax relief.
On pricing, the average UK room rent stands at £761 per month. Lodger ads average £729 per month, an annual saving of £385 for renters who take that route. In Greater London, where the average monthly room rent is £915, renting as a lodger at an average of £867 per month saves £569 per year.
Despite the lower cost of lodger rooms, broader affordability pressures remain acute: almost a third (32%) of UK renters and 35% of London renters have moved in the past 12 months because rising rents made their home unaffordable. Only 15% of UK renters and 13% of London renters spend less than 30% of their income on rent, excluding bills.
SpareRoom estimates that freeing up just 5% of the approximately 28 million empty bedrooms in England, Wales and Scotland would provide rented accommodation for 1.4 million people.
"Supply is down, which has already forced room rents to record highs in most regions," said Matt Hutchinson, director of SpareRoom. "The trouble is, rents were already well above the ceiling of affordability for far too many people. Flatsharing is the cheapest way to rent, so when room rents are out of reach, people are running out of options.
"Incentivising the use of under-occupied housing stock is a no-brainer and may be the fastest way to reduce intense pressure in the rental market, while boosting household finances, too. There are two ways to do that: increase the tax-free income threshold to reflect rents today, not in 2016, and add a 31-day minimum stay requirement to the scheme's terms, closing the loophole that allows people offering holiday lets to benefit from this tax relief. We have a housing crisis, not a hotel room crisis.
"Raising the threshold alone won't solve the housing crisis, but it will definitely help, and the effect is immediate, unlike house building which takes years to make a difference."
