Owning your own home

So for example, a £100k house might cost £5k to rent a year, which is the equivalent of a 5% (interest only) mortgage (no deposit).

So you paying £5k per annum to the bank or to your landlord is exactly the same thing.
It isn't throwing money away - it's a cost of living.

If you have an interest only mortgage, then yes, it's not really much better than renting, you can only hope the value goes up.

But unless you are an investor, an interest only mortgage is a ridiculous idea. Anyone buying for themselves should absolutely be on a repayment mortgage, and if you can't afford to, don't get into it.

So at that point your investment rather changes, and every time you make a mortgage payment you are building up equity. Of course that equity can shrink, but the more you pay off, the less likely you are to be greatly affected by that. Thanks to paying a mortgage rather than renting since I was 19, I now have a roughly 2:1 equity:loan ratio on my property.