>> 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

Looks like it's approximately following the curve to me (if you 
straighten out the oscillations around it). But then, that's not very 
statistically rigorous.

>> 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.

Yeah, but you can say that about most things just because of inflation. 
There was a time where you could buy an entire house - even a giant 
mansion - for less than £1,000, because that was a huge sum of money 
back then. ;-)

>> 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.

Yes. And?

> 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.

 From what I've seen, renting is drastically more expensive. If I want 
to borrow £100k, that's £600/month. If I want to rent somewhere, prices 
start at £800/month or so.

>> 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.

You forget that for the last 10 years, my salary has remained almost 
totally static. I'm assuming that's going to continue in the future. 
(This based on the fact that I work for a tiny company, and the 
financial director has made it her mission in life to never spend any 
money on anything, ever, no matter how necessary it is...)

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