Do Houses Really Go Up in Value?
Let’s set the record straight: real estate doesn’t go up in value over time.
Before you discard this as nonsense and label me as crazy, hear me out. This will take 3 minutes.
Everyone talks about how property is the “best investment” because house prices always go up. But the truth is, it’s not the houses that are skyrocketing in value, it’s the money we use to measure them that’s sinking in value.
The image at the top of this article is a great way of visualising this (I’m not just saying that because I made it). In 1980, the average house price in the UK was £19,273. Fast forward to today, and that same house will cost you around £288,000.
Did the house itself improve by 15 times? Did it gain 15 times more bedrooms, grow 15 times larger, or start generating 15 times the rental income? No. The house stayed the same.
Sure, you could argue that the interior was updated or the location became more desirable, but these are minor changes. The real shift was in the value of the pound (£).
Why Do Prices Seem to Always Rise?
Here’s the deal, the pound has been steadily losing its value (purchasing power) over the years due to inflation. The same pound that could buy you a lot in 1980 barely buys you a cup of coffee today.
This isn’t some conspiracy or baseless claim, it’s fact.
When people say “house prices are rising,” what they’re really seeing is how the currency they’re using to value the house is losing value.
Read that again.
It’s not the property getting more valuable, it’s the money getting weaker.
The Hidden Cost of Inflation
Inflation is often referred to as a “hidden tax.” It silently erodes the value of your money while you’re busy living your life. And this isn’t just a problem for property prices, it affects everything: food, fuel, and even your savings.
For example, if you saved £19,273 in cash in 1980, thinking you’d buy a house later, you’d have been in for a nasty surprise in 2024. That money wouldn’t even cover a 10% deposit on the same house today!
What Does This Mean for You?
Understanding this concept can completely change how you think about money.
It’s not just about working harder or saving more, it’s about understanding how money works and how to protect its value over time.
You work hard to earn your money, so shouldn’t learning how to stop it from losing value be just as important as making it in the first place?
My Own Journey...
I’ll be honest, when I first realised this, it hit me hard. Like most people, I thought saving more was the answer.
Do you blame me? My parents gave me a piggy bank, and when it got full, I’d smash it open with a hammer. I grew up learning how to save, not how to invest.
Was that wrong? Not necessarily, it worked for their generation. But the financial world is always changing. What worked 20, 30, or 40 years ago doesn’t work today.
When I finally clocked this, It forced me to take a step back and think differently about money. I started looking into ways to protect and grow my wealth over time, not just in pounds but in assets that hold their value.
That’s when I began to really understand why people talk about investing, not to “get rich quick” but to avoid being crushed by inflation.
I wrote this because I know most people find learning about money dull, but it baffles me that so many work so hard to make money and then pay so little attention to keeping it.
The next time someone tells you, “House prices always go up,” take a moment to think about what’s really happening.
It’s not the house changing, it’s the money.
House prices
This is a guest article by @JayW132. The above article should not be construed in any way as investment advice and the opinions expressed do not necessarily reflect the views of The Bitcoin Collective Ltd.
