Owning your own home

I believe the broad point in the long term. But equally it is perfectly possible to do the following (real life example, figures approximate, not me thank the lord!) -

Pay £140k for a flat in 2005
Spend £10k doing up flat in 2006-2011
Need £10k to finish doing up the flat in 2012
Need £12k to extend the unmortgagably short lease in 2012
Own a flat currently worth £120k, worth £140k in good condition with a good lease.

Whichever way you look at the owner has lost £30k, or approx £5k per year.

They have also been paying a mortgage of which the vast majority of the money out is interest, which is throwing money away as much as renting is. (You have a decision - who do you hate more, landlords or banks - tough call).

£5k per year would go a long way to paying the rent - or could pay for a room in a nice house in a nicer area.

Summary - buying a house / flat can be the single most important thing you do, massively beneficial from a financial and lifestyle point of view. But it is not a one-way bet, and bear in mind a long term view of house prices and where we are in the cycle, and take proper advice when you buy!

Lecture over!

If you buy a place that needs £20k worth of work that loses £20k in value, and which needs a £12k lease extension within 7 years, then you probably make all sorts of bad financial decisions and shouldn't be allowed to manage your own money.

Also, even in that example, losing £5k a year, you'd be up on me renting.