Market outlook for London
Key indicators for buyers
The London market is moderately favourable for buyers. Affordability has improved from a peak of 12.9x in 2021 to 10.6x today.
Price trends
Average sale prices · HM Land Registry / UK HPI
Affordability ratio
House price ÷ median earnings · ONS data
A home in London costs 10.6x the local median salary — very stretched, improving from a peak of 12.9x in 2021.
Rental trends
Average monthly rent · ONS Private Rental Index
Average monthly rent in London is £2,273, up 1.7% year-on-year. Rents have risen consistently over the past five years.
Monthly mortgage
2yr fixed · 75% LTV · 25yr term · BoE avg. rate
Based on the average London price of £554,422 with a 25% deposit (£139k), a 2-year fixed mortgage at 3.97% costs around £2,188 per month.
Rent vs buy snapshot
Monthly cost comparison based on current data
Monthly mortgage payments (£2,188) are £85 less than renting (£2,273). However, buying requires an upfront deposit of £139k — it would take around 8 years to recoup that cost compared to renting and investing the difference.
Data sources (all free & public): HM Land Registry Price Paid Data & UK House Price Index · ONS Housing Affordability Ratios · ONS Private Rental Index · Bank of England Quoted Household Interest Rates · HMRC Monthly Property Transactions
Contains HM Land Registry data © Crown copyright and database right 2021. This data is licensed under the Open Government Licence v3.0.