ShouldIRentorBuy.co.uk

Two people with the same budget are compared. The buyer spends their cash on the deposit and fees; the renter invests that same cash and keeps investing whatever they save each month. After your chosen horizon we compare total net worth, the fairest way to settle rent vs buy.

Included:

• SDLT for England & NI (2025/26) with first-time-buyer relief (0% to £300k, 5% £300k to £500k, no relief above £500k); standard bands run to 12% over £1.5m.
• Repayment mortgage amortisation, total interest, and the balance still owed at sale.
• Maintenance (% of current value), buildings insurance, service charge / ground rent.
• Legal, survey, arrangement & renovation costs; selling agent + legal on exit.
• Rent growth, contents insurance, and a 5-week tenancy deposit (returned at the end).
• Opportunity cost: the renter invests the deposit + monthly savings at your chosen return.
• House-price growth compounded monthly on the home's value.
• Capital Gains Tax on sale for a second home / additional property: the gain is the sale price less the purchase price, acquisition costs (SDLT, legal, survey) and qualifying capital improvements (the renovation figure); the mortgage arrangement fee is a finance cost and is not deductible. The £3,000 annual exempt amount is applied, then 18% (basic band) or 24% (higher band) per your selection. A main residence is exempt (Private Residence Relief).
• ISA allowance & CGT on investments: each year, contributions are sheltered in an ISA up to your annual allowance (£20,000 for 2025/26, frozen to 2030) and grow tax-free. Anything above the allowance that year sits in a taxable account, and its gain is taxed at sale (£3,000 exemption, then 18%/24%). The same applies to any buyer side-pot. Because a deposit-sized lump exceeds one year's allowance, part of it is typically taxable.
• Day-1 lump invested: by default the renter invests all the cash a buyer would tie up. Flex it down and the remainder is held as cash (no growth) but still counted in their net worth.

Assumed / excluded: Council tax, utilities and bills are treated as equal in both cases and cancel out. Renovation is treated as a capital improvement for CGT but is not auto-added to resale value, and routine repairs/maintenance would not be CGT-deductible. Capital gains realised by the renter are assumed taken in a single year; capital losses are not carried beyond the scenario. The model does not assume you gradually move existing taxable holdings into your ISA over time ("Bed & ISA"), so for a large day-1 lump it is a cautious (slightly high) estimate of the investment tax. Figures are nominal (not inflation-adjusted). SDLT optionally includes the 5% higher rate for additional dwellings and the 2% non-UK-resident surcharge (which stack); other reliefs (e.g. multiple-dwellings, mixed-use, lettings relief) are not modelled.

Not financial advice. A model is only as good as its inputs, so stress-test the growth, return and tax assumptions.