Inputs
Property price
£
Deposit
90% LTV
£
Rate
%
Term
yrs
First-time buyer
Standard SDLT rates with a £250,000 nil-rate band
Monthly rent
What you'd pay to rent instead
£
Rent inflation
%
House growth
%
Investment return
If renting & investing the deposit
%
Advanced — Ownership costs
▾
Service charge
/year
£
SC inflation
% pa
%
Ground rent
/year
£
GR inflation
% pa
%
Maintenance
% of property value per year
%
Buying costs
£
Selling costs
%
Results
Share your result
Over 25 years, the model suggests
Buying builds £320,186 more wealth
Buy net wealth
£556,886
Rent + invest wealth
£236,699
🏠Monthly payment
£1,449
Mortgage + running costs vs £1,000 rent
📋Monthly mortgage
£1,156
vs £1,000 rent
🏛Stamp duty
£0
Standard SDLT
💷Total upfront
£26,100
Deposit + SDLT + fees
Wealth accumulation over time
Buy (net equity)
Rent + invest
The green line shows what you'd walk away with if you sold the property in that year (equity minus costs). The orange line shows how much your investment pot would be worth if you rented instead.
Guide
In this guide
Back to calculatorRent vs Buy in the UK: A Complete Guide
The decision to rent or buy a home is one of the biggest financial choices you will make. In the UK, homeownership has long been seen as the default aspiration, but rising house prices, higher mortgage rates, and the growing accessibility of investment platforms mean that renting and investing can be a genuinely competitive alternative.
Use our Rent vs Buy Calculator above to model your specific scenario with current 2025/26 SDLT thresholds.
How SDLT Affects Your Decision
Stamp Duty Land Tax (SDLT) is one of the largest upfront costs of buying in England and Northern Ireland. For the 2025/26 tax year, the nil-rate band is £250,000 for standard purchasers and £425,000 for first-time buyers (on properties up to £625,000). This means a first-time buyer purchasing at £350,000 pays zero SDLT, while a non-first-time buyer pays £5,000. That is money that could otherwise be invested.
First-time buyers save up to £6,250 in stamp duty on properties under £625,000. Toggle the "First-time buyer" switch in the calculator to see the impact.
The Power of House Price Growth
When you buy with a mortgage, you are using leverage — a 10% deposit gives you exposure to 100% of the property value. If the house grows by 3% per year, your equity grows much faster in percentage terms. This leverage effect is one of the strongest arguments for buying, but it works both ways: if prices fall, your losses are amplified too.
Renting and Investing: The Alternative Path
If you rent, you avoid the large upfront costs (deposit, SDLT, legal fees) and the ongoing costs of ownership (maintenance, service charges, ground rent). The money you would have spent on these can be invested — typically in a stocks and shares ISA for tax-free growth. Historically, UK equities have returned around 5-7% per year after inflation, though returns are never guaranteed.
At the default 6% investment return, a £35,000 deposit grows to over £200,000 in 30 years — without adding a penny. Adjust the investment return slider to see how this changes.
Key Factors That Swing the Decision
The two biggest variables are house price growth and investment returns. A 1% change in either can flip the outcome. Other important factors include how long you plan to stay (buying tends to win over longer periods due to amortisation), your mortgage rate, rent inflation in your area, and whether you are a leaseholder facing service charge increases. London buyers face a higher cost of entry but also stronger historical price growth, while Northern cities offer higher rental yields relative to purchase prices.
What This Calculator Does Not Include
This model is illustrative. It does not account for inflation adjustments (all figures are nominal), tax on investment gains beyond ISA limits, the emotional value of homeownership, mortgage product fees and remortgaging costs, buildings insurance, council tax differences between renters and owners, or the risk of rental eviction. Always seek independent financial advice before making major property decisions.
Try Adjusting
House price growth and investment return are the biggest swing factors. A 1% change in either flips the outcome in many scenarios. Try setting house price growth to 0% to model a flat market, or push investment returns to 8% to see what a strong equity portfolio could deliver. The interplay between these two assumptions is where the real insight lies — small shifts can turn a clear "buy" into a comfortable "rent".
Head back to the calculator and experiment with the house price growth and investment return sliders — a 1% change in either can flip the result entirely.
Leasehold Owners
Don't forget service charge inflation — many leaseholds see 5-8% annual increases that can dramatically erode the financial advantage of buying. Ground rent escalation clauses can also compound significantly over time, particularly in older leases with doubling clauses. If you are buying a leasehold flat, open the "Advanced — Ownership costs" section in the calculator and set realistic service charge and ground rent inflation rates. The impact over a 25-year term can be tens of thousands of pounds.
Expand "Advanced — Ownership costs" in the calculator and try setting service charge inflation to 6% to see how leasehold costs compound over your mortgage term.
How We Calculate
The buying scenario models full mortgage amortisation (principal + interest), stamp duty (SDLT), conveyancing fees, annual maintenance, service charge, and ground rent. On sale, estate agent fees are deducted at 2.5%. The renting scenario invests your deposit at 6% pa and adds any monthly savings versus ownership costs to the pot. Rent grows at 3.5% pa. All figures are nominal — no inflation adjustment. This is an illustrative model, not financial advice.
Step-by-step calculation
- House value = purchase price × (1 + house price growth)years
- Remaining mortgage — standard amortisation: each month, interest accrues on the outstanding balance and the fixed repayment chips away at principal
- If the buyer's monthly costs are lower than rent, the difference is invested in a buyer's savings pot that compounds at 6% pa
- Buying wealth = house value − remaining mortgage − stamp duty − buying costs − selling costs (as a % of house value at that point) + buyer's savings pot
- Starting pot = deposit + stamp duty + buying costs (money never spent on the purchase)
- Each month, we compare the buyer's total outgoing (mortgage + service charge + ground rent + maintenance) with the renter's rent
- If buying costs more → the difference is added to the renter's pot (renter saves money)
- If renting costs more → the difference goes into the buyer's savings pot instead (buyer saves money)
- Both pots earn compound investment returns at 6% pa, applied monthly — the model treats both sides symmetrically
- Rent increases each year at 3.5% pa; service charge and ground rent inflate at their own rates