Rent vs Buy Calculator UK 2026

How to read your result

The calculator compares two wealth-building scenarios over your chosen time horizon. The buyer's net wealth is the property's value at the end of the period, less the remaining mortgage balance and selling costs. The renter's net wealth is the deposit they didn't have to pay, plus all the monthly costs they avoided, invested at your assumed return rate and compounded over the horizon.

The scenario with higher net wealth at horizon is financially better at your inputs. The break-even year is when buying first overtakes renting — under current UK conditions this is typically 7–10 years, though it can be sooner or never within the horizon depending on rates, deposit size, and rent growth in your area.

The numbers are the financial picture only. The lifestyle case for either option — flexibility, stability, the freedom to renovate, the freedom to relocate — sits alongside the maths and is yours to weigh.

For full mathematical specification and assumptions, see our methodology page.

Worked example: the UK 2026 average scenario

The defaults above use the UK averages as of early 2026:

• Property price £268,000 (ONS UK House Price Index, year to February 2026)^[1]
• Average rent £1,377/month (ONS Price Index of Private Rents, year to March 2026)^[2]
• Rent growth 3.4% p.a. (ONS PIPR YoY March 2026)^[2]
• House price growth 1.2% p.a. (ONS HPI YoY February 2026)^[1]
• Mortgage rate 5.75% (Moneyfacts average 5-year fix, April 2026)^[3]
• Bank of England base rate 3.75% (held 30 April 2026, third consecutive hold)^[4]

For a first-time buyer with a 10% deposit on the average UK home, these defaults produce a clear result you can read off the calculator above. Change any field — particularly your local rent and house price — to model your own position.

The true costs of buying a UK home

Buying involves significant upfront costs beyond the deposit. Stamp Duty Land Tax is the largest for most buyers — the rules changed materially in April 2025 when temporary thresholds expired (see SDLT section below). Solicitor fees typically run £1,000–£2,000, a homebuyer's survey £400–£600, and mortgage arrangement fees £0–£2,000 depending on the deal.

Ongoing costs are easy to underestimate. Maintenance and repairs are conventionally budgeted at 1% of property value per year, but recent UK research suggests actual spending is closer to 3% — equivalent to £627 per month, around two-thirds of the average mortgage payment.^[5] Buildings insurance runs £200–£400 per year for most properties. Leasehold flats add service charges of £1,500–£3,500 per year and ground rent (now banned on new leases under the Leasehold Reform (Ground Rent) Act 2022, but still owed on many existing leases).^[6]

The benefit you don't get when renting: every capital repayment on your mortgage builds equity. Over a 25-year term, the early years are mostly interest, but the equity share grows year on year. If house prices rise — the ONS records a 1.2% YoY increase to February 2026^[1] — that capital appreciation accrues to you, not your landlord.

The true costs of renting

Renting avoids the large upfront costs of buying — no deposit, no SDLT, no survey, no arrangement fees. Maintenance, repairs, and buildings insurance are all the landlord's problem. The flexibility to relocate without selling costs (typically 1.5%–2.5% of property value in agent fees plus legal^[7]) is a real economic benefit for anyone whose career or family situation isn't settled.

Rent does rise. The ONS Price Index of Private Rents shows UK average rent grew 3.4% in the 12 months to March 2026, down from 3.6% the prior month and the joint-lowest annual rate since March 2022.^[2] Within that average, the North East saw rents rise 6.5% YoY while London saw only 1.7%^[2] — your local figure matters more than the national average.

Renters miss out on equity. Every monthly payment buys housing services for that month and nothing else. But if the deposit money you'd otherwise commit to a property is invested instead — at, say, 5% real return in a diversified portfolio — the compounded total over 20–30 years is non-trivial and can outpace the equity a buyer accumulates, particularly in high-price low-rent markets or short holding periods. The calculator above models this directly.

Stamp Duty Land Tax: what changed in April 2025

Temporary thresholds introduced during the pandemic expired on 31 March 2025, and the standard rates returned to a lower nil-rate band. The current rates in England and Northern Ireland are:^[8]

The standard nil-rate threshold dropped from £250,000 to £125,000 in April 2025. The first-time buyer relief threshold dropped from £425,000 to £300,000, and FTB relief now caps at £500,000 (down from £625,000). HMRC collected £15.2 billion in SDLT in 2025–26, up 9.2% on the prior year, with the average bill on an English home rising around £2,500 overnight when the threshold fell.^[9]

If you're buying a second home or a buy-to-let, an additional property surcharge of 5% applies on top of the standard rates (raised from 3% in the October 2024 Budget).^[8]

Scotland uses Land and Buildings Transaction Tax (LBTT) with different bands and an FTB relief up to £175,000.^[10] Wales uses Land Transaction Tax (LTT) with no FTB relief.^[11] The calculator above handles all three regions — switch via the region selector under "Show advanced".

For full SDLT, LBTT and LTT calculations across all scenarios, see our Stamp Duty Calculator.

Beyond the numbers: lifestyle factors

The calculator answers a financial question. The full decision involves factors no model can quantify.

Buying suits people whose location, work and family situation are settled, who value stability and the freedom to alter a property, and who can absorb unexpected repair costs without distress. It punishes people who need to move within 5–7 years, because the upfront costs (SDLT, legal, survey, agent fees on the eventual sale) need time to amortise.

Renting suits people whose lives may move — career flexibility, family changes, uncertain medium-term plans — and who'd rather not carry concentrated exposure to a single illiquid asset in one local market. It punishes people who prefer permanence and want to control their own home.

Most people end up doing both at different life stages. The honest answer to "should I rent or buy?" is rarely universal — it's "given my horizon, my local prices, my career stability, and my appetite for property responsibilities, which option fits now?"

FAQ

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