Current Status: Rents across London remain elevated heading into 2026 following several years of strong increases and constrained supply. At the same time, house prices in many boroughs have softened and buyer competition has reduced. This has narrowed the gap between the cost of renting and buying, particularly for households with stable incomes and longer-term plans.

One of the most searched questions among London households right now is: Is renting still cheaper than buying in London in 2026?

The answer is increasingly nuanced. In some cases, renting is still cheaper in the short term. In others, buying has become competitive again — particularly when viewed over a medium to long-term horizon.

In 2026, the decision is less about monthly payments alone and more about stability, flexibility, and long-term cost exposure.

Why renting surged ahead of buying in recent years

Between 2021 and 2024, renting was often cheaper than buying for many London households. Rapid house price growth, rising mortgage rates, and transaction costs pushed ownership out of reach for a large segment of the market.

At the same time, strong rental demand and limited supply drove rents higher. Many households accepted higher rents in exchange for flexibility and lower upfront costs.

This created a period where renting was clearly the financially easier option, even if it offered little long-term security.

What has changed heading into 2026

Heading into 2026, several dynamics have shifted at the same time.

• House prices in many London boroughs have softened or stabilised
• Mortgage rates have eased from their peak
• Buyer competition has reduced, increasing negotiation power
• Rental supply remains constrained, keeping rents elevated

The result is a narrowing gap between renting and buying, especially for buyers with deposits and stable employment.

When renting is still cheaper in 2026

Renting can still be the cheaper option in the short term for certain households.

• Households planning to stay in London for less than three to five years
• Buyers without a sufficient deposit or cash buffer
• People with uncertain income or potential relocation plans
• Those targeting high-value areas where ownership costs remain significantly higher than rent

In these cases, the flexibility of renting can outweigh the financial benefits of ownership.

When buying can compete with renting again

For households with longer-term plans, buying is becoming more competitive again in 2026.

• Mortgage payments comparable to local rents
• Ability to fix housing costs for a period of time
• Protection against further rental inflation
• Opportunity to build equity rather than fund a landlord’s return

While ownership comes with maintenance and transaction costs, these are increasingly being weighed against rising rents and limited tenant security.

The London-specific calculation buyers must make

In London, the rent versus buy calculation varies sharply by borough and property type. Flats with high service charges may still favour renting, while houses or low-running-cost properties can tip the balance toward ownership.

Buyers should look beyond monthly payments and consider:

• Total housing cost over five to ten years
• Exposure to rent increases versus mortgage stability
• Upfront costs and ongoing maintenance
• Flexibility needs and lifestyle plans

In a slower market, buying the right property at the right price matters far more than the headline comparison.

Key takeaway

In 2026, renting is not automatically cheaper than buying in London. The gap has narrowed, and for some households, ownership now offers comparable monthly costs alongside greater long-term stability.

The right choice depends on time horizon, financial resilience, and personal priorities. In a calmer market, the best decision is rarely the one based on headline costs alone.

For wider market context, read: Why London house prices are falling and what the delivery system is signalling for 2026 | Should I buy a house in London in 2026?

image: constructionmagazine.uk

Expert Verification & Authorship: Mihai Chelmus Founder, London Construction Magazine