Rent vs buy calculator · England
Rent vs buy in London: is it cheaper to rent or buy?
Buying leaves you £32,967 better off after 7 years. Owning a 2-bed terraced house costs about £3,768 a month, against £2,385 to rent the same size home.
- After 7 years
- Buy +£32,967
- Difference in net wealth
- Monthly cost to own
- £3,768
- Mortgage £3,094, of which £934 is capital
- Monthly cost to rent
- £2,385
- Rent £2,232 plus council tax
- Median price
- £600,000
- terraced house
- Cash needed to buy
- £80,000
- £60,000 deposit + £20,000 SDLT
- Price-to-rent ratio
- 22.4
- Price divided by a year of rent
Renting vs buying in London by home size
| Bedrooms | Price | Rent / mo | Owning vs renting / mo | After 7 yrs |
|---|---|---|---|---|
| 1 bed | £430,000 | £1,760 | +£837 | Buy £53,154 |
| 2 bed | £600,000 | £2,232 | +£1,383 | Buy £32,967 |
| 3 bed | £630,000 | £2,643 | +£1,152 | Buy £69,496 |
| 4+ bed | £900,000 | £3,646 | +£1,766 | Buy £79,621 |
Average rent and house prices in London
The ONS average private rent in London is £2,332 a month (Aug 2026, provisional), up 3.5% on a year earlier. The median price paid is £530,000 (ONS median price paid, year ending Mar 2026).
Default scenario: 2-bed home, 7 years stay, 10% deposit, 4.80% fixed mortgage, monthly difference invested in a S&S ISA at 7.5%. Council tax is £1,839 a year (Band C) and is paid whether you rent or buy, so it does not change the verdict.
Renting or buying in London: FAQs
Is it cheaper to rent or buy in London?
For a 2-bed home in London, owning costs about £3,768 a month and renting about £2,385, both including council tax. Buying leaves you £32,967 better off after 7 years. This assumes a 2-bed home, 7 years stay, 10% deposit, 4.80% fixed mortgage, monthly difference invested in a S&S ISA at 7.5%.
What is the average rent in London?
The ONS average private rent in London is £2,332 a month across all home sizes (Aug 2026, provisional), with £1,760 for 1 bed, £2,232 for 2 bed, £2,643 for 3 bed, £3,646 for 4 or more bed. Rents rose 3.5% over the past year.
What is the average house price in London?
The median price paid in London is £530,000 (ONS median price paid, year ending Mar 2026). The calculator uses £600,000 for a terraced house, the property type typical for a 2-bed home.
How much is stamp duty on an average home in London?
A first-time buyer paying £600,000 would pay £20,000 in SDLT. With a 10% deposit of £60,000, the cash needed on day one is about £80,000.
What is the price-to-rent ratio in London?
About 22.4: the 2-bed price is 22.4 times a year of rent. Higher ratios favour renting; lower ratios favour buying.
Which home size is best value to buy in London?
On the default assumptions, a 4+-bed home gives buying its strongest position: buying ahead by £79,621 after 7 years.
How many years until buying pays off in London?
The lead first changes hands in year 4 on the default settings. Staying longer spreads stamp duty and selling costs over more years.
Areas with a similar price-to-rent ratio
Browse every local authority.