Don't rely on property as your pension, investment firm warns

See more This is Money on Google - save us as a Preferred SourceBy ED MAGNUS, SENIOR THIS IS MONEY REPORTER Updated: 10:48 BST, 11 June 2026

Britons should no longer rely on buy-to-let property to fund their retirement, a major investment firm has warned. Wealth manager Rathbones said the golden age of property investment was over, and that weak house price growth meant bricks and mortar was 'no longer a reliable investment for people seeking short or mid-term growth.'It added that while property returns previously exceeded that of other investments over thirty years, this was no longer the case. After adjusting for inflation, the average UK home was worth less in 2025 than in 2016, with the proceeds of a typical house sale buying less than they would have nearly a decade earlier, Rathbones said. Therefore, it is advising clients to focus on stock market investments. Those who did so in the last year would have made six times better returns than those relying on property, it claimed. Losing ground: House prices lagged inflation and investment portfolios in the past yearCharlie Newsome, senior investment director at the firm, said: 'We're seeing many people selling their buy-to-let and other rental properties because they no longer make sense as short to medium-term investments, and they are putting that money into invested portfolios instead.''Right now, residential property isn't seen as a driver of wealth for later life and retirement for most people.''Houses have a special role in British attitudes to wealth,' he added. 'But we need to think long term for our clients, helping them navigate economic shifts in order to still meet their goals.'Houses lost value in real terms in 2025 and significantly underperformed equities. Over the past year, house price growth has continued its slump, rising just 1.7 per cent - only half the pace of inflation. Meanwhile, a simple investment mix of 25 per cent UK equities and 75 per cent international equities rose by 11.8 per cent before dividends, Rathbones' analysis showed.Those who own a flat may have done even worse. The typical UK flat has fallen in price by 5.3 per cent in the 12 months to March, from £199,186 to £188,643, Land Registry data shows.Rathbones examined the recent performance of the housing market and the factors shaping house prices, including slower real income growth, higher mortgage costs, and a more demanding tax and regulatory environment around buy-to-let investments. It also examined house prices in the 25 local authorities in England with the highest density of second homes, given their common role in financial planning. It found that areas with high concentrations of second homes have also seen prices fall disproportionately, with 19 of the 25 recording declines in 2025, compared to 26 per cent nationally. This had risen to 20 of 25 by the first three months of 2026. Adam Hoyes, senior asset allocation analyst at Rathbones and author of the research, thinks there's been a structural shift for property. He said: 'This is not a one-off, rather it extends a poor run for UK house prices going back almost a decade.'[The research] notes a particular collapse in London, where house prices fell in 17 of the 32 boroughs in 2025, a total 1.7 per cent fall across the capital. 'This masks dramatic falls in some places, such as Westminster, Kensington and Chelsea, where prices plunged 14 per cent and 7 per cent respectively.'Best mortgage rates and how to find them Mortgage rates have shot up again due to inflation triggered by the conflict with Iran reversing hopes that the Bank of England would cut rates. This means those remortgaging or buying a home face higher costs.That makes it even more important to search out the best possible rate for you and get good mortgage advice, whether you are a first-time buyer, home owner or buy-to-let landlord.This is Money's partner L&C can help you with its fee-free mortgage service.> Compare mortgage rates> Find the right mortgage for you To help our readers find the best mortgage, This is Money has partnered with the UK's leading fee-free broker L&C.This is Money and L&C's mortgage calculator can let you compare deals to see which ones suit your home's value and level of deposit.You can compare fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes.If you’re ready to find your next mortgage, why not use This is Money and L&C’s online Mortgage Finder. It will search 1,000’s of deals from more than 90 different lenders to discover the best deal for you.> Find your best mortgage deal with This is Money and L&C Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage.