Let’s not kid ourselves about the price of our house rising fast enough for us not to have to think about savings, it’s just not like that anymore

Yes houses have gone up over the past five years in absolute terms but they are not going up much in “absolute terms and there are plenty periods of late when house prices have fallen the country over in real times

If we adjust UK house prices for inflation, they are the same level as 2003. In other words, if you bought a house in 2003, ignore the effects of inflation, then the average house hasn’t increased in value at all. In fact, house prices are 15% lower than the start of 2022 and 23% lower than the 2007 peak  .28 Mar 2025

https://www.economicshelp.org/blog/217170/economics/are-we-entering-a-new-cycle-of-rising-house-prices/

There has been a generation of youngsters who are now reaching retirement who have built up a lot of capital as equity in our property and in many cases properties that are bought for pleasure or to deliver income through short or long term lets.

But these properties have not generated the free money that the early experience of property holdings delivered in the years before 2008 and the end of free money.

The harsh reality is that residential property is no longer our pension and that phrase is very little heard these days. Without this “free money” from property as a capital asset, there has been reliance on income (by way of rent from residential flats and houses).

Here is a scary line showing us what has been happening to rental income.

The reality of property being the pension is not in the capital value of the asset but in the income it brings. In this respect , property can be a pension for those who have investment portfolios of properties yielding upwards of 9% in income.

What Bath University have divined from the numbers is that the cost of renting is being borne by those pensioners who are renting while those who own property find, as they slow down on work, that housing costs fall as debt comes to an end

Social Housing (right hand chart) is an increasing expense to those who are in retirement and renting. Homeowners see the real cost of housing stabilise . Because the cost of housing is lower (without debt) older people can spend more on essentials and luxuries while those renting are cramped in what they can do.

For the majority of the older generations who have got on the property ladder the real pay off is in retirement. House owners can enjoy the luxury of their pension. The renter is trapped by housing costs that cannot be controlled. Rent eats pensions, commercial landlords tuck into it!