A split market
For London renters, the latest figures raise a big question: could 2026 or 2027 be the right time to buy instead? Rents have reached a new high, rental homes are harder to find, and house prices remain below last year’s level.
But a cheaper-looking asking price doesn’t automatically make buying the better financial choice. Mortgage costs, your deposit, how long you plan to stay and the costs of moving all matter. The right decision depends on your circumstances, and it’s worth comparing the full picture before you act.
What’s happening to rents?
Rightmove’s Q3 2026 Rental Trends Tracker, released on 15 October, puts average advertised rent in London at a record £2,825 per calendar month. Annual growth accelerated to 3.2%, compared with 2.9% in Q2 and 2.4% outside London.
The averages differ across the capital. Inner London reached £3,349 a month, up 4.0% over the year; Outer London averaged £2,442, up 2.5%.
The supply figures help explain the pressure. Compared with a year earlier, available rental listings in London were down 9% and new listings down 7%, while renter demand was up 6%. That can mean more competition for suitable homes, particularly when your budget, location or moving date gives you limited flexibility.
These are advertised rents, rather than a measure of what every tenant actually pays. Still, they give a useful indication of the prices renters may encounter when looking for a new home.
Are house prices cooling?
There are signs of an autumn lift, but not yet a clear London-wide recovery. As reported by This is Money on 19 October, Rightmove data showed new London asking prices rising 2.5% month on month into mid-October. Yet they remained 1.7% lower than a year earlier. The monthly rise followed a weaker summer, when asking prices fell by 6% across July and August.
That’s a useful distinction: a rise in asking prices is not the same as a rise in completed sale prices. The October movement may reflect a seasonal increase in sellers coming to market, rather than a settled change in direction.
The longer view also shows differences between boroughs. Benham and Reeves research reported by Property Reporter found that rents outpaced house-price growth in 26 of London’s 32 boroughs between January and July 2026. Across London, average prices fell 0.10% a month while private rents rose 0.47% a month. Camden, Islington, Brent and Hammersmith & Fulham were among the boroughs where rents rose while prices fell.
But that wasn’t true everywhere. In Barking and Dagenham, for example, prices rose 0.82% a month while rents increased 0.15%. Local conditions matter, so broad London averages are a starting point, not a prediction for a particular home.
Buy or rent?
If you’re renting, it may be tempting to compare a monthly rent with a mortgage repayment and decide which is lower. The comparison needs more care than that.
With a mortgage, your monthly payment includes interest and may also repay some of the amount borrowed. As a homeowner, you’ll also need to budget for costs such as maintenance, insurance and service charges where applicable. Buying and selling can involve legal, survey and moving costs, as well as stamp duty depending on your circumstances.
Renting has costs too, and your rent doesn’t build a share of a home for you. But it can offer flexibility and avoids taking on the responsibilities and upfront costs of ownership. If you may move area or need to change home soon, that flexibility could be valuable.
Before deciding, look at:
- Your finances: deposit, mortgage affordability, likely repayments and other monthly commitments.
- Your plans: how long you expect to stay, and whether the home will suit you if your needs change.
- The whole cost: purchase and moving costs, maintenance and any ongoing building charges, not just the mortgage.
- Local choices: homes for sale and rent in the areas you could realistically live.
Mortgage costs are part of the picture. Rightmove reported that the average two-year fixed buy-to-let mortgage rate had risen to 5.34%, from 4.16% before the war in Iran began. That figure relates to landlord borrowing, not a typical residential mortgage offer. It does, however, help explain why investment decisions have become harder and why some would-be buyers may remain renters for longer.
Not ready to buy?
If buying doesn’t yet work for you, you’re not alone, and there are practical ways to make a rental search feel more manageable. In a market with fewer available homes, start early where possible and prepare documents commonly requested for referencing. Decide which areas and property features are essential, and where you might be flexible. Being ready to view and respond can help when a suitable home comes up.
Also plan your move carefully. In its review of the first four months of the Renters’ Rights Act, the NRLA noted that two-month notice periods can create overlapping-tenancy costs. If you’re moving, check your notice dates and speak with your current and prospective agents or landlords early. Clear communication may help you avoid paying rent on two homes for longer than necessary.
The NRLA review also reported that UK rent growth was 2.1% in the year to June, below earnings growth of 4%. That broader measure covers a different period and geography from Rightmove’s London advertised-rent figures, so it doesn’t cancel out the pressure many London renters face when searching for a new home.
Homeowner?
If you own a property, a softer sales market doesn’t mean you have to make a rushed decision. The October asking-price rise may look encouraging, but buyers are still weighing affordability, and an asking price isn’t a guarantee of an offer at that level. A realistic valuation and a clear view of your timing can help you decide whether selling now makes sense.
Letting instead may be worth exploring if you’re not ready to sell and your property suits the rental market. Strong demand and limited supply can be encouraging, but rent is only one part of the calculation. Mortgage payments, maintenance, periods without a tenant and the responsibilities of being a landlord all affect the likely return. Rules and costs can change too, so it’s sensible to understand what managing a let involves before committing.
What’s right for you?
Record rents and cooler house prices make buying worth considering for some London renters, but they don’t make it the right move for everyone. A careful comparison of your budget, plans and local options is more useful than trying to predict the market.
Lyss Homes is an independent local estate agency, and we’re here to offer free, honest advice without pressure. Speak to our team if you’d like to talk through whether buying or continuing to rent suits your situation. You can also search homes for sale and rent, or request a free valuation if you’re considering selling or letting your property.