Stark difference of buying in London rather than renting
First-time buyers looking to make money fast face a £100k difference between buying in some parts of the North rather than continuing to rent and investing their deposit, over doing the same in London.
The Tembo First-Time Buyer Index Q2 2026 showed that those who choose to buy rather than rent and invest their deposit elsewhere in London could be £11,854 worse off after five years, compared to continuing to rent and investing their deposit instead. Yet in Newcastle they would be better off by £89,172 if they were to purchase a property – a difference of £100k.
Meanwhile, in Manchester buyers would be better off over five years by £80,987; in Leeds, £70,026 and in Liverpool, £61,606.
Low deposits and income multiples in the north
In the north, relatively low deposits and income multiples are complemented by strong house price growth. In Manchester, first-time buyers need to borrow around 4.38 times their income to buy and property prices have risen 16.9%.
In London, the average first-time buyer must borrow the equivalent of 8.66 times their income, nearly double that of Manchester, to get onto the property ladder, but house prices have seen 0% growth over the past five years.
The deposit difference is also vast. The average first-time buyer deposit in London is £121,660, more than three times the £37,180 needed to buy in Liverpool and more than four times the £27,940 required in Hull.
Richard Dana, CEO and co-founder of Tembo, said: “London has always been a challenging place to buy a first home, but the financial equation facing buyers in the capital is becoming increasingly difficult. The upfront cost of buying is now so high that waiting can appear to make better financial sense in the short term. That leaves aspiring homeowners with some difficult choices: continue renting and saving, compromise on the home they buy, or look outside London for somewhere their money will go further.”
“That doesn’t mean buying a home is no longer worthwhile. Over the longer term, home ownership remains one of the most effective ways to build wealth and provides many benefits outside of wealth generation alone. But our findings show just how different the journey has become depending on where in the country you are trying to buy.”
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