Since 2022, the cost of living across the capital has risen sharply. For both renters and homeowners, the financial burden of securing a place to live has grown considerably driven by inflation, higher interest rates, and a surge in post-pandemic demand.
While national headlines often focus on mortgage rate pressures, the reality for renters particularly in prime central areas like Westminster and Pimlico has been even more striking. According to recent analysis from Zoopla and the ONS, rents have increased by an average of £221 per month since 2022, slightly outpacing the rise in mortgage costs over the same period.
In this report, we examine how those shifts have played out locally, looking at how rent and mortgage payments compare today for 1, 2 and 3-bedroom homes in Westminster and Pimlico, and what it all means for buyers weighing up their options.
The Rental Market: 2025 vs 2022
The cost of renting in Westminster has risen significantly over the past three years. As of June 2025, the average rent across the borough stands at £3,251 per month, up 7.1% on the previous year, and over 20% higher than in late 2022.
Average rents by property size:
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1-bedroom: approx. £2,576 pcm
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2-bedroom: approx. £3,353 pcm
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3-bedroom: approx. £3,957 pcm
In Pimlico, one-bedroom flats that were achieving around £1,950 pcm in early 2024 are now letting at over £2,200, a year-on-year rise of 13%. Meanwhile, family homes in the area regularly exceed £1,000 per week, particularly those in prime condition.
Put simply, renters in Westminster are now paying hundreds of pounds more each month than they were just two years ago, with increases outstripping wage growth and general inflation.
The Sales Market & Mortgage Landscape
While rents have soared, sale prices across Westminster have been more subdued. After peaking in late 2022, values dipped in 2024 and have remained largely flat since. Average sale prices in the borough today sit between £920,000 and £1 million some 5–20% below their previous highs depending on property type and location.
In Pimlico specifically, prices have corrected by approximately 13.5% since 2023.
The more notable shift for buyers has come in borrowing costs. With the Bank of England base rate now over 5%, mortgage rates have risen accordingly. Based on figures from Infina Private Finance, typical fixed rates today are:
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4.09% for 85% Loan-to-Value (LTV)
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4.03% for 75% LTV
In early 2022, these would have been closer to 2%.
This means that while property values have softened, the overall cost of buying has increased driven by higher monthly repayments, not higher prices.
Rent vs. Buy: A Monthly Cost Comparison
We’ve modelled three typical purchase scenarios in Westminster and Pimlico, comparing the monthly cost of renting with mortgage repayments based on a 10% and 25% deposit. Importantly, we also highlight the equity gained each month something renters don’t benefit from.
One-Bedroom Property
Estimated price: £600,000
Average rent: £2,500 pcm
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Buying with 10% deposit (£60,000 down):
Mortgage ~£540,000 at 4.09%
Monthly repayment: ~£2,880
– Interest: ~£1,840
– Capital repaid (equity): ~£1,040 -
Buying with 25% deposit (£150,000 down):
Mortgage ~£450,000 at 4.03%
Monthly repayment: ~£2,380
– Interest: ~£1,510
– Capital repaid (equity): ~£870
Summary: With 25% down, the interest portion of the mortgage is lower than the equivalent rent meaning the true cost of ownership is less than renting, and you’re building equity. Even with 10% down, the effective cost (interest only) is comparable, though overall cash outgoings are higher.
Two-Bedroom Property
Estimated price: £1,000,000
Average rent: £3,350 pcm
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Buying with 10% deposit (£100,000 down):
Mortgage ~£900,000 at 4.09%
Monthly repayment: ~£4,800
– Interest: ~£3,070
– Capital repaid: ~£1,730 -
Buying with 25% deposit (£250,000 down):
Mortgage ~£750,000 at 4.03%
Monthly repayment: ~£3,970
– Interest: ~£2,520
– Capital repaid: ~£1,450
Summary: For those able to put down 25%, the interest cost alone (~£2,520) is lower than the full rental amount making ownership more cost-effective long term. With 10% down, the overall monthly commitment is significantly higher, but roughly 35% of that payment goes into your own property.
Three-Bedroom Property
Estimated price: £1,500,000
Average rent: £3,950 pcm
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Buying with 10% deposit (£150,000 down):
Mortgage ~£1.35M at 4.09%
Monthly repayment: ~£7,190
– Interest: ~£4,600
– Capital repaid: ~£2,590 -
Buying with 25% deposit (£375,000 down):
Mortgage ~£1.125M at 4.03%
Monthly repayment: ~£5,960
– Interest: ~£3,780
– Capital repaid: ~£2,180
Summary: At this price point, the monthly costs are substantial. But again, with a 25% deposit, the interest element (£3,780) is slightly below the rental equivalent making buying more attractive for those with the upfront capital.
The Verdict: Rent or Buy?
For many, the total monthly mortgage payment will exceed the equivalent rent. But this can be misleading. A considerable portion of a mortgage goes towards building equity, meaning the effective “cost” of ownership is often significantly lower than it appears on paper.
In 2022, ultra-low interest rates meant buying was decisively cheaper. By 2025, higher borrowing costs have made that gap narrower, particularly for buyers with smaller deposits. Yet rents have increased to such a degree that, for those with 25% deposits, the interest component of a mortgage is often lower than renting particularly on one- and two-bedroom homes.
In short:
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With a 10% deposit, renting may offer more manageable monthly costs in the short term, but comes at the expense of long-term asset building.
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With a 25% deposit, buying increasingly offers better value, not only in equity growth but in reduced effective monthly outgoings.
For buyers able to raise a sufficient deposit and secure a mortgage in the 4% range, the balance is tipping back toward ownership especially in a market where rents show no sign of easing. Each pound paid in rent is gone forever. Each pound paid towards a mortgage helps buy your future.
Sources: Data from the Office for National Statistics (ONS), Zoopla, Infina Private Finance and Tuckerman Residential’s local market analysis. Figures accurate as of mid-2025.
If you're considering making the move from renting to ownership and would like to understand your mortgage options in more detail, we’d be delighted to assist. We work closely with the expert team at Infinia Private Finance and would be happy to introduce you to a dedicated adviser for tailored guidance.
