First-time buyers £64,000 better off over five years, new index finds
First-time buyers are, on average, £64,000 better off buying than renting over five years, according to data from mortgage and savings platform Tembo’s newly launched First-time Buyer Index.
The quarterly index, designed to track how accessible property ownership is across the UK, combines data on affordability, deposits, borrowing power, mortgage costs and regional housing trends, drawing primarily on proprietary data from Tembo’s customer base, complemented by official sources, such as the Office for National Statistics (ONS).
Using rent vs buy calculations that compare housing costs, mortgage interest, house price movements and investment returns over one- and five-year periods, Tembo found that first-time buyers were around £7,600 better off after one year and £64,000 better off after five years. The figures compare to those who continue to rent and invest their deposit elsewhere.
However, Tembo found challenges in getting on the property ladder. In the first quarter of 2026, the average deposit (£42,324) was higher than a full year’s take-home pay (£39,668). Saving can take over a decade for would-be buyers – 80% of whom already have nearly £10k in debt before they apply.
Monthly repayments have fallen, down by £163 year-on-year as the average first-time buyer mortgage rate dropped to 4.48% in the period, its lowest level in more than two years. This brought housing costs below 30% of income for the third consecutive quarter, according to Tembo.
However, the research showed that buyers are often borrowing up to 9-1x their income in order to get on the property ladder. The figure exceeds typical lending multiples.
Each quarterly addition of the index will include an overall “attractiveness score”. Six attractiveness bands range from very low (home ownership largely inaccessible) to exceptional (very supportive conditions) and have been designed to track whether conditions are improving or worsening for first-time buyers. For the first quarter of 2026, the score was a high 637 out of 800, indicating favourable conditions.
Glasgow most attractive for first-time buyers
By city, Glasgow ranks as the most attractive with buyers £122,872 better off over five years compared to renting.
Meanwhile, London is the least attractive with rent costing more than half of income (51%) and with loan-to-income ratios reaching 8.3, making home ownership more challenging.
Richard Dana, CEO of Tembo, said: “First-time buyers are facing one of the toughest markets in decades, with higher deposits, rising living costs and stretched borrowing requirements.
“But what this data shows clearly is that, over time, buying still significantly outperforms renting for most people. Trying to time the market perfectly is incredibly difficult. What matters more is getting on the ladder when you can and staying there.”
