While renting in London is basically a rite of passage for city makers, there comes a time when the prospect of owning your own place becomes ever more appealing.
Deciding whether to buy a home is one of the biggest decisions you’ll ever make, and what you can afford will most likely sway your decision. For many first time home buyers, the monthly cost of owning a home could actually be cheaper than renting. In 2025, average rents in London reached £2,736 per month, whereas the average first time buyer’s mortgage repayments were £1,162 per month.
Everyone’s circumstances are different, but if you’re thinking about moving from renting to owning, this blog will help you decide whether buying a home in London is right for you.
Should you rent or buy a home in London?
Both renting and buying have their advantages. If you’re thinking of buying your first home in London, consider the following benefits of each tenure type to work out the best outcome for you.
The benefits of buying in London
- With each monthly mortgage repayment, you build more equity in your home. That means your money is going towards your security and independence, rather than a landlord’s pocket.
- If property prices rise, you’ll benefit from the increase in value, especially if you downsize at a later stage.
- You’ll have the freedom to decorate as you like.
- Any money you spend on home improvements will likely add value to the property, which is beneficial if you come to sell.
The benefits of renting in London
- Renting requires a lower upfront cost than buying, typically consisting of a deposit and one month’s rent.
- You’ll have more flexibility with tenancies of different lengths.
- It will be easier and quicker to move to another property or location.
- You won’t have financial responsibility for appliance replacements, repairs or structural maintenance.
- You can choose between furnished and unfurnished properties depending on your needs.
How to decide
If you’re still deciding whether to rent or buy in London, ask yourself the following questions.
Do I have enough saved for a deposit?
Whether you have enough for a deposit depends on the value of the property you want to buy. Most lenders require you to put down a minimum 10% deposit, but some will offer mortgages with just a 5% deposit.
It’s worth noting that having a higher deposit can unlock better mortgage rates, so even if you already have enough for a deposit, you may decide to continue renting while you save more to put down a bigger deposit.
Check out these saving strategies if you want to give your deposit fund a boost before buying a home in London.
Can I afford the additional costs of buying a home?
Alongside the deposit, you’ll need to budget for the other costs of buying a home. These include:
- Survey costs
- Solicitor fees
- Mortgage arrangement fees
- Stamp duty
- Removal costs
- Insurance
- Initial furnishing and decorating costs
Do I earn enough to afford a mortgage?
This depends on the size of the mortgage you need for the home you are buying. Typically, lenders will loan you up to 4.5 times your annual salary.
When you apply for a mortgage, the lender will assess your income, expenses and any other credit you have to make sure you can afford the monthly repayments along with your usual living costs.
If you don’t earn enough for the mortgage you need, you could consider a guarantor mortgage. This is when someone else, like a parent or family member, agrees to take financial responsibility for any missed mortgage repayments by the borrower.
Buying a home with Pocket Living
If you’ve decided that you’re ready to move from renting to buying, check out our first time buyer guide to learn more about the buying process.
Pocket homes are exclusively for first time buyers. We offer 100% ownership at least 20% below market value. Explore our developments and create a My Pocket account to register interest in homes you may be eligible for.