Renters could be £64,000 better off in five years with swap

First-time buyers are £64,000 better off than renters over five years, a study has claimed. Mortgage brokers Tembo have launched their first-ever 'First-Time Buyer Index' that aims to provide a snapshot of how accessible the housing market is. Its research has concluded first-time buyers are on average £7,600 better off after one year and £64,000 better off after five years compared to those who rent and invest their deposit elsewhere. The £64,000 figure is worked out based on the calculation that buyers would have an overall financial position of +£18,419 in five years while renters would have a financial position of -£45,454. This is worked out using renters' costs and returns for investing in the stock market compared to the buyers' increase in house price, mortgage costs. The findings also highlight the scale of the challenge facing today's buyers, with rising deposits, stretched borrowing and sharp regional inequalities continuing to hold many back. The First-Time Buyer Index combines data on affordability, deposits, borrowing power, mortgage costs and regional housing trends. It draws primarily on data from Tembo's customer base, alongside sources such as the Office for National Statistics (ONS). It will be published quarterly and will include an overall 'attractiveness score' designed to track whether conditions are improving or worsening for first-time buyers over time. The score for Q1 2026 is 637, indicating very high/broad accessibility. Despite stagnant incomes, Tembo says falling mortgage rates have improved affordability in the short term. The average first-time buyer mortgage rate dropped to 4.48%, its lowest level in more than two years, reducing monthly repayments and bringing housing costs below 30% of income for the third consecutive quarter. However, upfront costs remain a major obstacle as saving for a typical deposit now takes over a decade for many buyers, assuming modest saving rates. Tembo say most buyers are entering the market with existing debt, with 80% carrying an average balance of £9,277 in loans prior to purchase. Glasgow is ranked the most attractive city for first-time buyers, as house prices were reported to have grown by 37% yet rent prices are ranked 15th out of 20 for affordability. This leaves the index to suggest buyers in Glasgow would be £122,872 better off over five years compared to renting. London is the least attractive city, with rent consuming over half of income (51%) and loan-to-income ratios reaching 8.3. More affordable cities such as Hull, Derby and Stoke offer lower barriers to entry but higher-growth cities like Manchester, Bristol and Edinburgh continue to attract buyers despite greater financial pressure. 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 on there. With this new index, we want to give would-be first time buyers clearer, data-driven insights to help them understand their options and make more confident decisions." You can view Tembo's 'first time buyer index' here: www.datocms-assets.com/15134/1777288941-tembo-first-time-buyer-index-q1-2026-2-1.pdf