First-time buyers in northern cities risk losing thousands of pounds by postponing a purchase, while those in the South may benefit financially from waiting, research suggests.
Aspiring homeowners in the northern cities analysed by Tembo would be an average of £8,139 worse off if they delayed buying for a year. Those in southern cities would be £2,757 better off, creating a regional divide of almost £10,900 in the short-term financial consequences of waiting.
The findings come from the Tembo First-Time Buyer Index for the second quarter of 2026, which compares the position of somebody buying immediately with that of a prospective buyer who continues renting and invests their deposit for another year.
The index combines Tembo’s data with official housing market statistics. Its calculations include rents, mortgage repayments, equity accumulated through capital repayments, projected house price movements and returns earned by investing a deposit.
Tembo said home ownership remained an effective means of building long-term wealth in much of Britain, but that the financial case for buying had become increasingly dependent on location.
The analysis comes as proposals to replace council tax with a land value tax have revived debate about regional differences in the costs of owning a home.
AFFORDABILITY RECOVERY STALLS
Conditions for first-time buyers were at their most affordable in more than two years during the first quarter of 2026, according to the index. That improvement was reversed in the following three months as mortgage rates and house prices rose.
Tembo’s First-Time Buyer Attractiveness Score fell from 637 to 598, moving from the “High” category to “Moderate”.
The number of homes available to first-time buyers increased in almost every city covered by the research, with Brighton the exception. However, the benefit of greater choice was offset by higher purchase prices, larger deposit requirements and rising borrowing costs.
House prices increased in 14 of the 21 cities analysed. Deposits and loan-to-income ratios rose in 70% of the cities.
MARKET BECOMES MORE DIVIDED
In many northern cities, comparatively affordable house prices allow buyers to begin accumulating equity immediately while avoiding further rent payments and potentially benefiting from house price growth.
The calculation is less favourable in much of southern England, where larger deposits and higher mortgage payments have reduced the early financial gains from ownership. Tembo said buying still produced greater long-term wealth than renting in southern cities, although those gains could take longer to emerge.
Richard Dana, chief executive and co-founder of Tembo, said: “Much of the current debate around regional inequality starts from the assumption that the North is always at a disadvantage. Our data tells a more nuanced story.
“For first-time buyers, many northern cities now offer a far stronger route into home ownership than London and much of the South, allowing buyers to begin building wealth much earlier. That’s a reminder that when we talk about regional opportunity, housing has to be part of the conversation.
“In the country’s most expensive markets in the South of England, particularly London, the upfront cost of buying has become so high that waiting can seem to make better financial sense in the short term. That doesn’t mean home ownership is no longer worth pursuing.
“In fact, over the longer term it still remains one of the most effective ways to build wealth. But it does underline how uneven the market has become and why first-time buyers increasingly need advice that reflects the realities of where they live, rather than a one-size-fits-all message.”
