For decades, owning your own home has been seen as the ultimate financial milestone in Britain.
It has been seen as providing a sense of security as well as – in many people’s eyes – a valuable asset.
It is often seen as so safe, that “my property is my pension” is commonly used in investing parlance by those who plan to release equity from their home or downsize later in life to fund their costs.
For these people – a home is their ultimate source of wealth growth, and their financial fallback. But is it safe to treat it as such?
Latest figures show property prices are falling slightly – and there are signs they may drop further this summer as rising interest rates, driven by an expected bump in inflation since the start of the war in Iran, have limited what buyers can afford.
In fact, property price growth has slowed dramatically in recent years compared to the rates seen in the 1990s and early 2000s.
So is getting on the property ladder still the best path to financial security in Britain, or for those with large amounts of their money invested in property – is it time to rethink? The i Paper spoke to experts to find out.
Stock market providing better returns
Even before recent property price falls, analysis shows that based on returns alone, property is not a better investment than buying equities, which are shares in companies.
Pension and investment firm Fidelity looked at returns between September 2015 and August 2025 and found the UK residential property market has struggled to consistently beat inflation.
Over the past three years, UK residential property actually fell in value by 9 per cent once inflation was factored in.
Over the last 10-year period property produced a positive slim real return – meaning after inflation was factored in – at around 6 per cent.
In contrast, investing long-term in stocks has provided people with stronger growth.
Fidelity found global stock markets delivered a real return, after inflation, of 26 per cent over three years, 45 per cent over five years and 132 per cent over 10 years.
Analysis by Standard Life found similar. It took a typical first-time buyer deposit of £61,000 and showed how this money would grow over a 10-year period invested in the UK property market at a house price growth rate of 3.8 per cent.
This was compared to the same amount being invested in the FTSE 100 – a stock market index of major UK companies – and S&P 500 – a US equivalent – with annual returns of 5.3 per cent and 14 to 15 per cent respectively.
However, it is important to remember that these comparisons aren’t like-for-like.
Buyers typically fund a home purchase by a deposit plus a mortgage – but their gains are earned on the entire property value, not just the deposit. This essentially allows people to have far bigger investments than they would otherwise – because part of it is funded by borrowing.
But the borrowing means the actual cost is also far bigger than the price of the house. Borrow £200,000 over 25 years on a 4.5 per cent mortgage, and you’ll repay around £333,000.
There are other charges to consider with buying a home too.
“Maintenance, service charges, and repairs,” are all key ones that buyers sometimes don’t account for, according to Charlie Lamdin, a housing commentator best known for his YouTube series Moving Home With Charlie – which often warns buyers about the dangers of overpaying for homes.
Buying to live in it? Your home is more than an investment
The blunt truth is that comparing buying a home to investing in equities is not entirely fair – you can live in one, the other is purely a vehicle to make money.
Mike Ambery, retirement savings director at Standard Life said figures showing that investing produced better returns than property were not “an argument against buying a home”.
“A property isn’t just a financial asset, it’s somewhere to live,” he said.
Lamdin, although he warns against expecting dramatic price rises, says there are many reasons why someone would choose to buy regardless of price growth.
“People buy for security, stability, and peace – not primarily as an investment. Owning gives control over your space, no landlord worries, a sense of roots – especially for families – and the ability to personalise or improve without permission. In an uncertain rental market with rising rents and evictions, it feels like a safe haven,” he says.
But there are also circumstances when some may choose to rent – and invest the money they have saved – instead of buying, he says.
This may be more the case for those who desire flexibility. He points out that buying has “high entry costs” – deposits, stamp duty, fees – for those who don’t intend to stay in their property or area for very long.
“Renting can sometimes be financially safer and more flexible, especially if you invest the savings elsewhere,” he says
‘I doubled my savings investing’
Jelena Micunovic now rents instead of buyingJelena Micunovic, 37, is someone who has chosen to rent instead of buy, and to invest her cash instead.
Jelena initially bought a flat in London for £365,000 in 2018 with her partner. They sold that home five years later for £400,000, and are now renting instead.
She said: “Initially back in 2018 our rent was £1,400 per month for a one bedroom in Hackney, and when we bought our two-bed flat, which was also much bigger, our mortgage was around £950 per month.
“However following the interest rates rises, we eventually fell into the monthly rate of £1,950. This was after our fixed term ended.”
The couple sold their flat for £400,000 in 2023 and rented out a 5-bedroom property in the Cotswolds for £2,000 a month.
“At this stage we realised we should probably look to invest the £50,000 house deposit we had saved into other things and hold off buying the next property as the math didn’t work in favour of buying. We invested money into an ISA, crypto and stocks and shares and we doubled our savings in a year,” Jelena explained.
It is important to note crypto is seen as a high-risk investment and is not currently regulated by the Financial Conduct Authority – meaning if consumers lose money from being invested in crypto schemes or products, they are not eligible for compensation.
In 2024, Jelena was able to start her own business with the interest earned from the investments she had made, while still protecting her core house deposit.
Considering buy-to-let vs investing? The equation is different
Where the difference in investing vs buying is really a fairer comparison is when people are buying multiple properties, with the homes primarily an investment, rather than to live in.
Greg Moss, a chartered financial planner and founder of Eleven.2 FP, said in reality, the long term case for equity investments “has always been stronger than direct property investment” for a number of reasons including “average returns” and “liquidity”.
“British investors have always had a soft spot for buy to let as an asset class which they understand and which is more tangible than stock market investments,” he says.
But the arguments keeping that soft spot in place are reducing, he says.
As well as relatively low returns – even lower in recent years – Moss describes the tax treatment of landlords as “relatively hostile” now.
They will face a 2 percentage point increase in tax rates next year, while finance costs, such as mortgage interest, can no longer be deducted directly from rental income to calculate taxable profits.
“We tend to tell clients there are much easier ways to get your returns than directly held property,” concludes Moss.
Some experts do think property can have a place in an investment portfolio, but they also offer caveats to that.
“Property offers a tangible asset, the potential for rental income and the ability to use borrowing to enhance returns. However, it is generally illiquid, management intensive and increasingly less tax-efficient than it once was. A single property also represents a significant concentration of risk in one asset and one location,” explains Graham Nicoll of NCL Wealth Partners.
And what about people who still use that term – “my property is my pension”?
“It’d say this is something that works better in principle than in practice. I’ve seen very few clients downsize and release equity to fund their retirement, even though many of them talk about it. The problems are you’re relying entirely on growth in a single asset class, which is risky, and it’s very hard to predict housing needs that far ahead,” Moss says.
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