Rent or Buy in London? The Decision Facing Prime Central London Buyers in 2026

For anyone considering a move to Prime Central London, an interesting disparity is emerging between the sales and rental markets. Property prices remain under pressure; sellers are increasingly having to acknowledge today's market, and well-advised buyers can find opportunities that would have been difficult to secure a few years ago. The rental market, meanwhile, tells a rather different story. Rents remain high, good-quality stock can be difficult to find and competition for the best houses and apartments remains strong.

So, for someone looking to establish themselves in London, is it better to rent or buy?

As ever, the answer depends on individual circumstances. But the current market makes the calculation particularly interesting.

A Buyers' Market – But Not for Everything

The headline numbers suggest that buyers currently have the upper hand.

According to LonRes, average achieved prices across Prime London in August were 7% lower than a year earlier, while the average discount from asking price on properties sold during the month was 10.4%. Perhaps more tellingly, around half of all properties currently available have already had their asking price reduced.

That doesn't mean that every property is cheap, nor that every seller is prepared to negotiate. Far from it.

One of the most important parts of our job at Dawes London is establishing the difference between a seller who would like to sell and one who genuinely intends to. There are still plenty of owners whose expectations are based on what they paid, what their neighbour achieved several years ago, or the amount they have subsequently spent refurbishing the property. None of those necessarily determine its value today.

Equally, we are seeing sellers who recognise where the market is and are prepared to transact accordingly.

For buyers who can identify those situations, there are some very interesting opportunities.

The Best Properties Are Different

However, there is an important distinction between the wider market and genuinely exceptional property. The best house on a sought-after street, a beautifully refurbished apartment with an exceptional outlook, or a particularly scarce property can still attract several interested buyers.

This is especially true because buyers have become increasingly reluctant to undertake major refurbishment projects themselves. Turnkey properties command a premium because they remove the uncertainty, cost and time associated with building work.

So while this may broadly be described as a buyers' market, buyers shouldn't assume they can acquire every property at a substantial discount.

Knowing when to negotiate hard – and when not to lose an exceptional property over the final few percent – is increasingly important.

Meanwhile, Renting Isn't Getting Any Cheaper

The contrast with the rental market is striking. LonRes reported that Prime London rents in August were 3.8% higher than a year earlier and more than 40% above their pre-pandemic average. Knight Frank has also reported constrained supply, with the number of new rental listings across Prime Central and Prime Outer London in the three months to August running below the five-year average. At the very top of the market, renting has also become an increasingly popular choice. Some international and high-net-worth clients who might previously have bought soon after arriving in London are choosing instead to rent for 12 or 24 months. It gives them flexibility while they become familiar with London, consider their longer-term plans and, in some cases, wait for greater certainty around tax. That can make complete sense.

But flexibility comes at a price.

A substantial annual rent over two or three years quickly becomes a meaningful sum, particularly when the alternative may be acquiring a property in a sales market where values have already adjusted considerably.

So When Does Buying Make Sense?

We think one of the most important considerations is the length of time you expect to own the property.

The costs associated with purchasing in London – particularly Stamp Duty – mean that buying for a very short period can be difficult to justify. If you are uncertain about where you want to live, expect your requirements to change, or only plan to be in London for a year or two, renting may offer valuable flexibility. The equation begins to change for someone expecting to remain in London for considerably longer. At that point, the cumulative cost of renting needs to be considered alongside the opportunity to purchase in what is currently a relatively weak sales market.

Nobody can reliably call the bottom of a property market. Waiting for absolute certainty usually means waiting until conditions – and often prices – have already changed.

For long-term buyers, the more useful question is whether a particular property represents good value today and whether it is somewhere they would be happy to own through the inevitable ups and downs of the market.

There Is No Single London Property Market

It is also worth remembering that averages only tell part of the story.

Chelsea behaves differently from Knightsbridge. A family house in Holland Park has a different buyer pool from a lateral apartment in South Kensington. Best-in-class properties behave differently again.

Even within individual streets, two apparently similar properties can have very different values depending on position, outlook, condition, lease length, floor level, outside space and a host of other factors.

This is why broad predictions about whether "London property" will rise or fall are of limited use when making an individual purchase.

The question is not simply whether London represents good value.

It is whether this particular property represents good value.

Rent First, Buy Later?

For some clients, renting before buying is exactly the right strategy. It allows someone new to London to understand which neighbourhood suits them, test the school run or commute and learn what they really value in a property before committing significant capital. We increasingly advise clients on both sides of that decision.

Our rental search service can identify and secure the right property for clients who want flexibility, while our buying service is focused on finding opportunities – both on and off market – and ensuring clients acquire them on the best possible terms.

The key is to make renting a deliberate decision, not the default option while you wait for the market to become clearer.

An Interesting Time to Be a Buyer

The Prime Central London sales market has been through a prolonged adjustment period. Knight Frank's latest figures show average Prime Central London prices down 3.3% over the past year and substantially below their peak levels. That doesn't mean prices cannot fall further. But it does mean that today's buyer is entering the market from a very different starting point to someone purchasing at the height of the market. For buyers with a long-term horizon, that creates opportunities – particularly where a motivated seller, a high-quality property and sensible pricing coincide. The challenge is finding them.

At Dawes London, we act exclusively for buyers and tenants, providing independent advice, access to both on and off-market opportunities, and experienced negotiation across Prime Central London.

If you are considering whether to rent or buy in London, we would be delighted to discuss your circumstances and the opportunities currently available.