Your Home Isn't an Investment. It's an Anchor.

Photo by Matteus Silva: https://www.pexels.com/photo/exterior-of-brick-house-in-city-5994406/

A few days ago I was running a session with students on the topic of good debt versus bad debt.

We agreed quickly on the basics: good debt puts money in your pocket, bad debt takes it out. Simple, clean, intuitive.

Then we looked at a mortgage, and categorised it as "good debt."

And I had to stop myself.

Because here's the thing: a residential mortgage is not generating income for you. Not while you're living in it. You're paying the bank every month, and in return, you get to stay in a house you don't yet own. That's not a cash-flowing asset. That's an expensive subscription.

Now, I get the counterargument. Property goes up in value. You're building equity. You're not "throwing money away on rent." I've heard all of it. And sure, there's truth in parts of it.

But let's talk about what happens the moment life gets complicated.

You Can't Just Walk Away

In the UK, selling a home in favourable conditions takes around 4 to 6 months from listing to completion (Ready Steady Sell, 2025). That's the optimistic version. Research from Home Sale Pack found the UK is actually the slowest country in the developed world for property transactions, with an average of 183 days, just over six months (Open Property Group, 2024).

So if your circumstances change due to a job loss, a health crisis, or a relationship breakdown, you cannot quickly liquidate this asset. You are tied to it. Every month, the bills keep coming: council tax, water, energy, buildings insurance, maintenance. These costs don't pause because life got hard.

Want to Rent It Out Instead? Ask Your Bank First.

Let's say you're smart about it. You think: "If I can't sell, I'll rent it out, cover my costs, and move somewhere cheaper."

Reasonable plan. Except your bank has a say in that.

When you take out a residential mortgage, you sign a contract that requires you to live in that property. Renting it out without permission is technically a breach of your mortgage terms, and lenders treat it seriously, up to and including repossessing the property (AXA, 2023).

You can apply for what's called "consent to let," but it comes with conditions: most lenders require you to have held the mortgage for at least 6 months, have no arrears, and have a legitimate reason for the request. Some charge fees; NatWest and RBS, for example, charge £120 upfront and £120 annually. Others increase your interest rate, with Nationwide adding 0.5% and Yorkshire Building Society adding 1% (Trinity Financial Group). And even if you get permission, it's usually granted for a limited period of 6 to 24 months, not indefinitely.

Insurance Won't Save You Either. Not Fully.

People often say: "That's what insurance is for."

Yes and no.

Mortgage Payment Protection Insurance (MPPI) will only cover redundancy if you were made redundant involuntarily, meaning the company let you go rather than you resigning or being dismissed for cause. If you reduce your hours voluntarily, or move to self-employment, you likely won't qualify (MoneyHelper, UK Government).

Accident and sickness cover pays out when you can't work due to illness or injury, but it stops when treatment ends rather than when you're fully recovered and financially stable again. Most policies pay out for a maximum of 12 to 24 months (MoneySuperMarket, 2025). Beyond that, policies often exclude pre-existing conditions, impose waiting periods of 30 to 90 days before the first payment, and may not cover partial income loss at all.

The Real Cost of Buying "Your Own Place"

There's a version of this story where a residential mortgage makes complete sense. You have job security, a long-term partner, no plans to move, and genuine peace of mind matters to you. That's a valid life choice.

But in the context of building financial freedom, buying a home to live in is one of the slowest paths available to you. Every pound of your deposit is locked into bricks, and every year you're in the property is a year your capital isn't working for you elsewhere.

The alternative, buying a buy-to-let property, is a different conversation entirely. That's debt that generates income. That's a mortgage someone else is paying for you. That model has its own complexity and costs, including the need to prepare the property for rental and often requiring accessible cash beyond just the deposit. But at least it's structured around building something rather than simply owning something.

The point isn't that you should never buy a home.

The point is: don't call it a good investment just because you were told it was.

If you want to understand how to use debt strategically, the kind that puts money in your pocket, I share frameworks like this regularly. Follow along or reach out directly.