Buy vs Rent London Calculator
Enter your situation and see the true 10-year cost of buying a London property versus renting — including stamp duty, mortgage interest, opportunity cost, and property appreciation.
Buy vs Rent Comparison
Fill in your details below — results update each time you calculate
— % of price
Current average 5yr fix: ~4.3–4.8%
Comparison Result
True total cost: buying vs renting in London
Fill in your property price, deposit, rent, and time horizon, then click Compare Buy vs Rent to see the full financial picture.
London Buy vs Rent Scenarios
Typical London scenarios at common price points over a 10-year horizon, assuming 25% deposit, 4.5% mortgage rate, 4% annual house price growth, and 6% opportunity cost on deposit.
| Property Price | Monthly Mortgage | Stamp Duty | 10yr Buy Cost (net) | Typical Monthly Rent | 10yr Rent Cost | 10yr Verdict |
|---|---|---|---|---|---|---|
| £300,000 | £1,042/mo | £2,500 | £68,000 | £1,400/mo | £193,000 | 🏠 Buy wins |
| £450,000 | £1,563/mo | £12,500 | £105,000 | £1,900/mo | £262,000 | 🏠 Buy wins |
| £550,000 | £1,910/mo | £17,500 | £138,000 | £2,300/mo | £317,000 | 🏠 Buy wins |
| £750,000 | £2,604/mo | £27,500 | £202,000 | £3,100/mo | £427,000 | 🏠 Buy wins |
| £1,000,000 | £3,472/mo | £43,750 | £295,000 | £4,200/mo | £579,000 | 🏠 Buy wins |
| £1,500,000 | £5,208/mo | £93,750 | £530,000 | £5,800/mo | £799,000 | 🏠 Buy wins |
Indicative only. Net buy cost deducts accumulated equity. Rent includes 3% annual increase. All figures rounded. Use the calculator above for your exact scenario.
Buy vs Rent London FAQ
The most common questions about buying versus renting property in London, answered plainly.
It depends on how long you plan to stay. Buying has very high upfront costs — stamp duty, solicitors, surveys — which take years to recoup. Over 10+ years, buying typically becomes financially advantageous due to equity building and rent inflation. If you plan to move within 3–5 years, renting is usually cheaper when you factor in transaction costs and opportunity cost on your deposit.
Stamp Duty Land Tax (SDLT) is a tiered tax on property purchases in England. The rates are: 0% up to £250,000; 5% on £250,001–£925,000; 10% on £925,001–£1.5 million; 12% above £1.5 million. First-time buyers pay nothing on the first £425,000 and 5% up to £625,000. Second homes attract an additional 3% surcharge on all bands. On a £500,000 home mover purchase, stamp duty is £12,500.
Most lenders require a minimum 5–10% deposit. A 15–25% deposit typically unlocks the best mortgage rates, saving thousands in interest over the term. On a £500,000 property, 10% is £50,000 and 25% is £125,000. You also need to budget additional funds for stamp duty, solicitors (£1,500–£3,000), survey (£400–£1,500), and mortgage arrangement fees (£500–£2,000).
Beyond mortgage payments, budget for: buildings insurance (£300–£600/yr), maintenance and repairs (roughly 1–2% of property value annually), council tax (£1,200–£3,500+/yr depending on borough and band), and if leasehold, service charges and ground rent (£1,000–£5,000+/yr). Leasehold charges are common in London flats and can be significant. This calculator uses 1.5% of property value per year as a maintenance estimate.
Opportunity cost is the return you give up by tying money up as a deposit rather than investing it. If you put £100,000 into a property deposit instead of a diversified investment portfolio returning 6% per year, you forgo roughly £79,000 in investment growth over 10 years (compounding). This is a real financial cost of buying that is often overlooked, and this calculator adds it to the true cost of buying for a fair comparison.
London property has historically grown at roughly 5–6% per year over the past 25 years in nominal terms, though with significant periods of flat or negative real growth (2008–2013, 2017–2020). Growth is highly uneven across boroughs and property types. Past performance does not guarantee future results. This calculator defaults to 4% annual growth but lets you model different scenarios.
London rents have risen significantly in recent years, with inner-London averages climbing sharply since 2021. Over longer periods, rents have broadly tracked wage growth at 3–4% per year, though there have been volatile periods. This calculator applies your chosen annual rent increase to project rent costs over your time horizon. At 3% annual increase, £2,000/month rent today becomes approximately £2,688 in 10 years.
Not necessarily. Buying wins financially over long periods in most London scenarios, but it depends heavily on: the price you pay, your mortgage rate, actual house price growth, what you could earn on alternative investments, and your personal circumstances. For short time horizons (under 5–7 years), renting often wins once transaction costs are factored in. The best financial choice is highly individual — this calculator gives you the data to make that decision for your specific situation.