Owning your own home

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.

I don't understand, surely it doesn't matter if your house depreciates by x in 5 years if you're intending on living in it for the next 30 years/the rest of your life? And is the 20k spent on doing it up really 'lost' money? I'd have thought that living in the house of your dreams is worth more than paying less to live in a rented place you can't touch.