The UK version factors in Stamp Duty bands, first-time buyer relief and the real upfront cost of buying. See which wins over your time horizon.
Price, deposit, and the mortgage that follows.
What renting the same place would cost.
How long, and what each pound is earning while you wait.
Breakeven year 2, when buying first overtakes rent + invest.
Your SDLT bill: £8,750 (1.5% of price). This is sunk cost on day one, it has to be recovered by home appreciation before buying breaks even with renting and investing. First-time buyer relief applied.
Stamp Duty Land Tax is the upfront tax you pay when buying property. The bands are stacked, each rate applies only to the slice of the price within that band.
First-time buyer: 0% to £425k, 5% on the slice £425k, £625k. No relief above £625k.
Second home / buy-to-let: +5% surcharge on top of standard rates.
Illustrative figures only, 2025/26 HMRC bands. Not advice. For your situation, consult a qualified adviser.
Worth runs your full balance sheet against the buy-vs-rent decision continuously, not just today. Join the waitlist.
Roughly three to five years in most scenarios, longer if you're paying the higher SDLT bands. Below that, renting and investing the deposit usually wins. Above seven to ten years, buying tends to win because home appreciation compounds against fixed transaction costs.
Implicitly yes, the home value grows on the full property value while you only put down the deposit. That is leverage. The flip side: if property prices fall, leverage works against you. Stress-test with a 0% or -2% appreciation scenario to see how solid your buy case is.
Because if you choose to rent, that capital stays free. The deposit and the SDLT bill are both opportunity costs of buying, they could otherwise be earning your chosen investment return for the duration of the horizon.