Is buying a home still a good investment?

Buying a home has always been seen as a bit of a financial “rite of passage” – a way to set yourself up for the future. But recently? It’s been more like a rollercoaster.

Mortgage rates shot up, house prices slowed down, and homeowners were left paying more each month for properties that weren’t gaining much value. Not exactly the dream, eh?

So, is home ownership still worth it? Let’s break it down.

Why house prices stepped on the brakes

Back in the day, house prices used to rise faster than inflation – making them feel like a solid investment. But since around 2016, that pace has cooled off.

Here’s why:

• For years, interest rates were super low = cheap mortgages = buyers could splash out more = house prices climbed.
• Then, post-pandemic, inflation spiked and interest rates jumped. Mortgages suddenly became pricey … and with fewer people able to buy, house price growth slowed down.

Where we’re at now

Fast-forward to 2025 and the market feels… different:

• Mortgage demand is ticking up. Over 64,000 mortgages were approved in June – 1,500 more than analysts had forecasted – so more people are dipping a toe back in.
• Prices are slipping (a little). Rightmove says the average asking price fell 1.2% in July to £373,709.
• More homes could be on the way. Government schemes aim to make housing more affordable and boost supply, which could keep growth steady instead of sky-high.

Why a slowdown isn’t all bad news

If you’re looking to buy, slower house price growth might actually be on your side:

• Homes could be a bit more affordable than last year.
• Less of that “buy now or it’ll be way more expensive next month” panic.
• A chance to step onto the ladder without prices sprinting away.

Of course, buying a home is still a big commitment (and markets can always shift). But unlike shares or funds, a home isn’t just an investment – it’s a roof over your head, and it means rent payments can go towards your own equity instead of a landlord’s.

And don’t forget – there are a few tools to give you a boost too, like the Lifetime ISA, which lets first-time buyers save for a deposit with a handy government top-up.

The bigger picture

Sure, stocks and shares have beaten property growth in recent years. But homes bring something extra: security, stability, and the chance to make a place your own (finally paint those walls the colour you actually want).

So while house prices aren’t climbing like they used to, this slower pace could be the moment for first-time buyers to make their move.

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🔔 Remember, investing involves risk and nothing in this article should be taken as advice - Dodl doesn't give advice, but we do hope the info is helpful! LISA rules apply.