Getting people on the property ladder seems to be a major goal for the UK government these days. In the UK, just like in the Us, owning your own home is considered a birthright and the most common way to save for retirement for the middle class. As A German, I find this fascination with homeownership rather baffling, especially since
As a cash asset, I agree that real estate may not be risk adjusted better than owning stocks. But a mortgage is the only viable way for most individuals to get access to really cheap, high leverage. Assuming that real estate is as risky as stocks and returns the same, putting 10% deposit on a mortgage is essentially being 10x long equity, short bonds which over long enough periods (which is reasonable for homeownership) has been a very lucrative trade, especially as it allows for compounding earlier. With that kind of leverage, even if it returns less than equities, it could still be a good investment.
As a cash asset, I agree that real estate may not be risk adjusted better than owning stocks. But a mortgage is the only viable way for most individuals to get access to really cheap, high leverage. Assuming that real estate is as risky as stocks and returns the same, putting 10% deposit on a mortgage is essentially being 10x long equity, short bonds which over long enough periods (which is reasonable for homeownership) has been a very lucrative trade, especially as it allows for compounding earlier. With that kind of leverage, even if it returns less than equities, it could still be a good investment.