Ok, first world problem.
I like the idea of doing a lot of the UK by train. I get to look at the scenery and someone else is driving. I suspect it would work out a lot cheaper too and since I have no real "must see" items and have never been there, I think I could find interesting things no matter where I go.
On the other hand, hire car. Greater flexibility, and I have somewhere to store my suitcase while checking out a town or forest I don't intend staying in.
Pommy cars are generally woefully underpowered and even hire cars typically have a manual transmission - if you prefer to drive an automatic, you may need to jump through a few hoops to get one from a UK car rental place.
Fuel is eyewateringly expensive in the UK, though distances are obviously far shorter. Traffic is endemic, and is heavy pretty much everywhere, pretty much all the time. If you're used to driving in Australia, particularly rural Australia, it's astonishing that even remote country lanes in the UK have a lot of other motorists on them.
Train travel can be very nice, and very comfortable, if you avoid the peak times of the day and of the week (any travel a Friday, but particularly if it's the Friday of a long weekend, will be less comfortable; The mainline routes out of London to Scotland can also be pretty crowded midweek).
Fares vary hugely depending on when you want to travel (cheaper fares often imply less overcrowding) and how far in advance you book - a ticket to travel today will cost a LOT more than a ticket for the same trip in three months time.
If you know well in advance where and when you want to travel, you can often get a first class advance ticket for less than a standard class "turn up and go" fare. We did that for our travel on the East Coast Mainline (London Kings Cross to Edinburgh and on to Inverness, with a break in Leeds) and it was well worthwhile as we were travelling on New Years Eve, which meant that Standard Class was a sardine can. Even in First Class we had to chase some people out of our reserved seats.
Of our last two trips, one was a road trip covering a lot of ground in a rental car, and the other we did mostly by train; Both were a good experience. Our next trip will involve much less travelling around, and we plan to do it by public transport, mostly train - driving around would be a bit of a busman's holiday for me.