Buy vs Rent · London
Buy or rent in London — where the break-even falls
In a rising market buying almost always wins over a long horizon. In a flat or falling market the calculus changes. Here is the honest 2026 London break-even.
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The SDLT drag on break-even
SDLT is the largest upfront cost and the main reason short-hold buying rarely wins. On a £500,000 purchase a standard owner-occupier pays £12,500 — the equivalent of about a year's rent on a comparable Zone 3 flat, or four to five months in Zone 2. That cost is sunk on day one. For buying to beat renting, capital growth, equity build and avoided rent must recover it plus the ongoing ownership premium over your hold period.
FIFSCORE™ settles it on your numbers, not a generic calculator — framing your real break-even against London carrying costs.
Buying vs renting in London — side by side
| Buying | Renting | |
|---|---|---|
| Upfront cost | Deposit + SDLT + legal/survey (~3–6% of price) | Deposit (capped at 5 weeks' rent) + first month |
| Monthly outgo | Mortgage + service charge + ground rent (leasehold) | Rent + contents insurance; often lower than a mortgage |
| Flexibility | Selling costs + slow exit; lease risk on flats | Notice period; easy to move for work or life |
| Wealth building | Equity + any appreciation; lease can erode it | None on the asset; deposit stays liquid |
| Best when | You will stay long enough to clear SDLT + selling costs | Your horizon is short or uncertain |
Directional comparison — your break-even depends on your price, rate, lease length and how long you stay.
Mortgage vs rent — the 2026 gap
At mid-2026 rates (roughly 4.5–5.5% on a two-year fix), a £400,000 mortgage at 5% over 25 years costs about £2,340 a month — comparable to renting a 1-bed in Zone 2 or a 2-bed in Zone 3+. Ownership is not dramatically cheaper than renting in most London scenarios today, which compresses the buy-vs-rent advantage. The equity build is the real long-run edge, but it accrues slowly in a repayment mortgage's early years.
When buying wins in 2026
Buying wins over a 5–7 year hold if you have a 20%+ deposit that keeps payments below equivalent rent, the property is freehold or has a long lease with no major works looming, and you buy where supply is constrained. It wins faster if leasehold reform commences and lifts leasehold-flat values — but do not buy on that assumption, because the timeline is unconfirmed.
Not sure which fits your situation?
Tell Fia your rent, deposit, target price and hold period — get a personalised buy-vs-rent break-even grounded in the real London monthly cost of each.
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Get My Read →Frequently asked questions
Is it better to buy or rent in London in 2026?
It depends on your hold period and whether you can carry the monthly cost. Under about three years, SDLT alone usually makes renting cheaper; over 5–7 years with a solid deposit and a sound lease, buying tends to win.
Does leasehold change the buy-vs-rent maths?
Yes — a short lease adds an extension cost and can erode value, so factor the lease length and any service-charge major works into the ownership side before comparing.