Should you rent or buy? Both options have pros and cons, and the right choice comes down to your financial situation, location, and long-term goals. In this guide, we’ll break down everything you need to know about renting vs buying property in the UK. Once you’re settled into your new accommodation, Remitly can help you send money back home quickly and securely.
Understanding the Current UK Housing Market
The UK property market has seen major changes in recent years. House prices have risen significantly, making it harder for first-time buyers to step onto the property ladder. At the same time, rental prices have also increased, making it more important than ever to weigh up the costs and benefits of both options.
With high interest rates and rising fees, buying a home can involve a lot of upfront costs. On the other hand, renting means continuous spending without building equity. So, is it better to rent or buy? Let’s take a closer look.
Market statistics at a glance
- Around 19% of all households privately rent their homes
- As of 2023, the average age of first-time buyers is 34 years old
- The average property price in London is approximately £680,000 and in the rest of the UK is approximately £267,000
Regional Variations in the Property Market
You won’t be surprised to know that the UK housing market varies considerably. Here’s a quick look at the key regional differences:
London and the South
- Highest property prices on average
- More competitive market due to higher demand
- Typically requires a larger deposit
- Higher monthly rental costs
Northern England
- More affordable housing options
- Rental costs are lower on average
- Greater value for money in terms of space
- Increased investment opportunities
Scotland and Wales
- Different legal systems for property purchase
- Varying stamp duty regulations
- Different rental laws and tenant rights than England
Key Factors That Might Influence Your Decision
Before deciding whether to rent or buy, consider the following factors:
- Your financial situation: Do you have enough savings for a deposit? Can you afford monthly mortgage payments?
- Job stability: Are you planning to stay in the same place in the long run?
- Lifestyle preferences: Do you want the flexibility to move around easily?
- Long-term investment: Are you looking to build property value over time?
- Responsibility for repairs: Are you comfortable maintaining your property or would you rather have a landlord take care of it?
Financial Insights into Renting vs Buying
There are several financial differences to consider before making your decision. As a renter, your biggest upfront costs will likely be the deposit and the first month’s rent. Buying, however, requires saving for a mortgage deposit, paying stamp duty, legal fees, and covering upfront expenses.
Comparing costs: rent, mortgage, and additional expenses
| Cost Type | Renting | Buying |
| Upfront costs | Deposit (typically one month’s rent) | Deposit (10-20% of property price), stamp duty, legal fees, surveying costs, and more |
| Monthly costs | Monthly rent | Mortgage repayments, insurance, maintenance costs |
| Long-term costs | Subject to rental increases, no equity is built | Builds equity, potential for property value growth |
| Maintenance & repairs | Landlord is responsible | Homeowners handle repairs and maintenance |
Impact of interest rates on buying property
In recent years, rising interest rates have affected the UK property market, increasing borrowing costs and reducing home affordability. Over 1.2 million UK homeowners have tracker or standard variable rate mortgages, meaning that they’re immediately affected by rate hikes.
With the Bank of England maintaining interest rates at 5.25%, the average mortgage rate has risen to 5.44%, making it harder for homeowners to manage monthly payments. While the majority of mortgages are fixed rate, they are only fixed for a set period, exposing homeowners to rate increases over time.
- Fixed-rate mortgages lock in your interest rate for a set period (usually 2-5 years). They might initially be higher than other rates, but they protect against rate increases during the fixed term.
- Tracker mortgages follow the Bank of England base rate. This means your payments go up and down with the base rate, offering lower initial rates but less certainty over future costs.
- Standard variable rate (SVR) mortgages are what you typically move onto after a fixed-rate or tracker deal ends. The lender sets the rate and can change it at any time. It is usually higher than the other options but has more flexibility to overpay or exit early.
Long-term investment and return potential
Buying property is often seen as a good investment since homes can increase in value over time. However, property prices can fluctuate, and selling a home comes with costs like conveyancing and solicitor fees. Renting may not build equity, but it avoids market risks.
Renting vs Buying: The Pros and Cons
This section looks at the advantages and potential risks of renting and buying in the UK. Both options have their perks — and their pitfalls. So, which one suits you best? Let’s break it down.
Benefits of renting a property
- Freedom to move: Not sure where you want to put down roots? Renting lets you try out different cities, neighbourhoods , or even lifestyles (for example, seaside tranquillity in Brighton or big city life in Manchester) before committing.
- Lower upfront costs: Forget about hefty down payments and legal fees. Renting only requires a deposit and one month’s rent.
- Less responsibility: Boiler breaks? Roof leaks? No problem — it’s your landlord’s job to fix it, not yours.
- Live where you want: Renting makes it easier to live in prime areas like central London or Oxford, where buying might be out of reach.
Drawbacks of renting
- No long-term investment: Your monthly payments go to your landlord, not towards owning a home.
- Rent can increase: A great deal today doesn’t mean it’ll stay that way — your landlord could raise the rent when renewing your contract.
- Limited options: Want to paint the walls or hang up paintings? This won’t be possible without explicit permission.
Benefits of buying a property
- Building equity: Unlike renting, every mortgage payment takes you one step closer to owning your home.
- More stability: No risk of landlords selling up or increasing the rent — your home, your rules. You can get settled in your neighbourhood and build a long-lasting community.
- Make it your own: Want a new kitchen or a home office? When you own, you can renovate to your heart’s content.
- Potential financial gains: Property prices in many areas, like the commuter belt around London, have historically risen over time.
Drawbacks of buying
- High upfront costs: Between the deposit, solicitor fees, and stamp duty, buying a home is a big financial commitment before you even move in.
- Ongoing maintenance responsibilities: As a homeowner, it’s down to you for repairs and upkeep, from fixing leaky pipes to replacing a broken boiler.
- Less flexibility: Selling a home takes time and isn’t always easy, so if you need to move for work or personal reasons, you might not be able to relocate quickly.
Lifestyle Considerations
Your lifestyle and future plans play a major role when deciding whether to rent or buy. It’s not just about money, it’s about what works best for you and your situation.
How long are you staying in the UK?
If you’re only planning to stay in the UK for a few years, renting is the better option. It gives you the flexibility to move without the financial commitment of homeownership. If you see yourself settling down long-term, buying could be a good investment, helping you build equity instead of paying rent to a landlord.
Flexibility or stability?
Renting is ideal if you need to move around for work or just want the freedom to explore different areas before committing. However, if you’re ready to put down roots and create a permanent home, buying offers security and the option to customise your space as you wish.
Location, location, location
Some cities, such as London, have higher property prices that make renting the more practical option, while other regions — like the Northwest or the Midlands — offer more affordable opportunities to buy. It’s important to also consider factors like job opportunities, public transport, school districts, and access to communities that cater to immigrants.
Common Pitfalls and How to Avoid Them
Navigating the UK housing market as an immigrant comes with its challenges. Here are some things to watch out for:
- Scams targeting immigrants: Be wary of fake landlords, rental scams, and deposit fraud. Use reputable estate agents, visit the property, and verify the details before paying anything.
- Misunderstanding contracts: The terminology and language in rental agreements and mortgages can be complex. If you’re unfamiliar with UK housing laws, seek legal advice before signing anything.
- Hidden costs: Unexpected expenses can arise with both renting and buying. Be prepared for costs like council tax, community fees, and service charges.
- Housing discrimination: Some landlords and agencies could be hesitant to rent to immigrants due to visa status or lack of UK credit history. Knowing your rights can help you challenge unfair treatment.
Final Thoughts
At the end of the day, choosing between renting and buying depends on your personal situation and long-term goals, among many other things. There’s no one-size-fits-all answer and what’s right for one person may not be the best option for another. By weighing up the pros and cons and understanding both options, you’ll be in the best position to make a smart, informed decision for your future in the UK.
Frequently Asked Questions
Is it better to rent or buy in England?
Renting offers flexibility, lower upfront costs, and less responsibility for maintenance. Buying, on the other hand, is a long-term investment that provides stability and the potential to build equity over time. If you plan to stay in the UK for the foreseeable future and can afford the upfront costs, buying might be the best option.
What is the 30% rent rule in the UK?
The 30% rent rule says to spend no more than 30% of your income on rent. While this is a guideline, affordability depends on your location, lifestyle, and financial obligations. In expensive cities like London, renters can easily end up spending more than 30% of their income on housing.
Do more people rent or buy in the UK?
The UK has historically been a nation of homeowners, but renting has become more common among young people and those living in big cities. While the majority of Brits own their homes, in cities like London, renting is more popular due to higher property prices.
Where can I find houses to rent or buy in the UK?
Nowadays, the easiest place to compare properties is online. Popular websites for buying or renting houses in the UK include RightMove, Zoopla, and OnTheMarket. Shopping online can give you a great idea of prices and availability in different areas, as well as help you connect with agencies and private landlords. However, it’s always a good idea to visit the property in person before making any decisions.