The received wisdom is that getting on the property ladder is a savvier move than renting.
However, data shows that might not be the case for buyers in the capital – at least in the short term.
Aspiring property owners in London could be left £23,491 worse off after one year if they bought a home compared to if they had continued renting, according to analysis by mortgage broker Tembo.
In contrast, those in cities such as Belfast, Newcastle and Glasgow could see an overall financial gain of more than £12,000 in their first year of homeownership.
Tembo compared the financial position of someone buying today with someone who continued renting. Crucially, the buyer in its scenario would have invested their deposit for the extra year while they continued renting and made an average rate of return.
If their deposit was kept in a savings account with a poor interest rate instead of being invested, they would almost always be better off buying a home rather than delaying.
Tembo's analysis takes into account rental costs, mortgage repayments, equity built in the home, projected house price movements, stamp duty and investment returns on the deposit.
The findings suggest that while home ownership continues to be an effective way of building long-term wealth across much of Britain, regional differences in the financial case for buying are becoming more pronounced.
As well as London, Tembo found first-time buyers in Birmingham could make a loss in the first year of home ownership, compared to renting and investing their deposit – though the difference was far less at just £308.
Across many northern cities, relatively affordable house prices allow buyers to build equity from day one while benefiting from house price growth and avoiding rising rents.
In much of the South, however, bigger deposits, stamp duty and higher mortgage costs have narrowed those early financial gains, making the economics of buying less compelling in the short term.
House prices in some southern towns and cities are also growing less than the rest of the country.
In London, the average home costs £553,000. That means paying £17,650 in stamp duty even as a first-time buyer.
At present someone buying that property with a 10 per cent deposit could also be paying £2,836 a month on their mortgage, based on a typical 4.75 per cent rate and a 25-year repayment term.
That's a lot more than the average London rental of £2,181 a month, according to tenant referencing data produced by HomeLet.
Contrast that to someone buying the average property in Glasgow. The average property there is worth £187,000.
A first-time buyer buying the average home won't pay any stamp duty as it is under the £300,000 threshold. If buying with a 10 per cent deposit and securing a 4.75 per cent mortgage rate, they could expect to pay £959 a month with a 25-year repayment term.
That means they are making a small saving compared to the average rent, which is currently £1,024, according to Zoopla.
The benefit of buying will come from the fact that some of their mortgage payments are going towards repaying the debt and therefore increasing their equity in the property.
It will also come from house price growth, with northern regions expected to see prices rise more than in the South over the coming years.
Gains balloon in the long term
While the journey to making gains in the South may take longer, home ownership still delivers greater long-term wealth than renting in most cases.
Over a five-year horizon, buying a home builds substantial wealth compared to renting, based on Tembo's analysis.
This ranges from a whopping £87,291 in Northern Ireland, Wales and Scotland, to a more modest £47,221 in central England.
In the South of England as a whole, owning a home delivers a £58,141 financial benefit after five years.
The only city that doesn’t deliver a return after five-years is London, where an owner would still be £11,854 worse off than they would be if they were renting, according to Tembo.
Paul Elcino, director of mortgages at Tembo, thinks the case for getting on the ladder remains a strong one.
He says: 'When you look past the immediate noise, homeownership remains the ultimate long-term wealth creator. The old advice still holds up: time in the market beats trying to time the market.
'No matter what the seasonal data dials show – in all areas aside from London – buying a home builds substantial personal net worth over a five-year horizon compared to staying trapped in the rental cycle.
'Across the first half of 2026, the numbers prove that owning generates an extra £61,621 of long-term financial value in the North and £58,141 in the South, proving that the wealth-building journey simply takes a little longer depending on your location.'
Affordability metrics across the board have worsened, with interest rates and house prices increasing.
Between April and June, the average first-time buyer deposit rose by £3,000 to £45,000 compared to the first three months of the year, according to Tembo.
This extends the time needed to save a typical first-time buyer deposit from 10.7 to 11.3 years on average.
Mortgage rates also moved higher following the conflict in the Middle East with the average first-time buyer mortgage rate going from 4.48 per cent to 4.96 per cent.
It means the typical first-time buyer is now having to fork out £51 more a month than they were earlier in the year.
While affordability has worsened, property availability across the UK has surged.
Across the UK, 21 out of 22 cities analysed saw a direct increase in properties listed for first-time buyers compared to the first three months of the year.
This has resulted in a 17 per cent national increase in listed options, giving buyers significantly more choice as they enter the market.
While London saw the largest volume increase, regional hubs are leading the charge for percentage growth.
Stoke-on-Trent, Glasgow and Bradford all recorded substantial jumps in first-time buyer stock.
Brighton remains the sole exception to this trend, with available listings falling and further tightening the local market.
Mortgage rates have shot up again due to inflation triggered by the conflict with Iran reversing hopes that the Bank of England would cut rates. This means those remortgaging or buying a home face higher costs.
That makes it even more important to search out the best possible rate for you and get good mortgage advice, whether you are a first-time buyer, home owner or buy-to-let landlord.
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