In December the number of renters registering to find a room fell by 13% compared to June 2011.
The supply of rental rooms however has increased steadily with a rise of 7% over the same period.
Jonathon Moore, director of Easyroommate, said: “Tenants looking for new houseshares will have breathed a sigh of relief as competition for accommodation eased late in the year.
“A combination of a seasonal drop-off in tenant demand and an encouraging increase in the number of rooms to rent coming onto the market has helped alleviate pressure.”
Competition was fiercest in Cambridge with an average of nearly 12 potential tenants registering per room.
The South East was the most competitive region with three cities in the top five.
London had 6.7 renters per room, Brighton & Hove had 6.1 renters per room and Oxford had 5.6 renters per room.
Moore added: “In top hotspots like Cambridge homeowners are making an average of £5,460 per year with the first £4,250 tax free, making a sizeable dent in mortgage repayments.
“London and its satellite towns, where the local economy has been moving at a different pace from the UK, have been experiencing much higher levels of demand.
“Even in off-peak, young professionals are looking for flexible and cheap living arrangements as they move for job opportunities.”
West Bromwich and Salford were the only areas in the UK where rental accommodation outweighed demand with an average of one tenant per two rooms in West Bromwich and 0.8 per room in Salford.
