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http://www.moneyweek.com/~/media/MoneyWeek/2009/090309/09-03-11-MM2.ashx?w=450&h=362&as=1
>
> So, prices rising approximately in line with inflation.

No. They've gone up much faster than inflation:

http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php

> Besides, this is the average rate for *all* properties. I'm sure buying
> new properties gradually gets more expensive. What about the ones that
> are already built?

Historically they've gone up too. You can go onto something like 
nethouseprices.com and check the sale prices of individual houses 
historically. Or just ask someone who bought a house 20 years ago how 
much it is worth today compared to what they paid for it. My mum's house 
is worth 3x what they paid for it, and the one before that my parents 
sold for 7x what they paid for it.

> If you rent something, you must pay rent for the rest of your life. If
> you mortgage something, then (hypothetically) you will eventually *own*
> it, and then you don't have to pay any more money.

Yes, but by your reasoning you would then own a house with a drastically 
lower value than what you have paid for it. On the other hand if you had 
rented you would be able to save the difference between the rent and 
mortgage, the value of which would go up with inflation rather than 
down. At the end you'd have more than if you sold your "old" house. But 
it doesn't work like that - house prices have historically gone up above 
inflation, even old ones.

> Sadly, because I've started so late in life, I will never actually pay
> the whole of the mortgage off. And even if I do, I'll still be renting
> the other 70% of the property. But hey, it's all I could afford.

You forget that your mortgage is calculated on making the same payment 
every month for X years, but your salary will hopefully go up. At some 
point you'll either want to pay more per month (and reduce the term) or 
take out more mortgage.

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