Property's position as the most likely investment to generate a good return is over, say brokers.
A third of respondents to an exclusive IFAonline survey – 32.2% and by far the biggest proportion – resoundingly say they wouldn’t choose property as an investment in 2007.
And more than half of those surveyed are wary of the dangers of investing in property at the moment.
Their response comes as little surprise, given rising interest rates and shrinking rental yields - and an expected further rate rise tomorrow.
Yet the second-most popular option – “Probably, it usually does well” – garnered a surprisingly high 27%. And 15.8% of those surveyed are convinced property is still a good investment, particularly with the advent of Reits.
Historically, of course, property has performed well and in the last 20 years, investing in property through the stock market has outperformed UK shares, according to Halifax Financial Services.
Since 1987, £1,000 invested in the FTSE Real Estate index would have grown to £7,630 while the same amount invested in the FTSE 100 would have only grown to £6,710.
In the last five years the gap is even more marked with property outperforming standard shares by three times. The FTSE 100 return on £1,000 would be just £1,420 while the Real Estate index would have brought in £2,880.
But a quarter of IFAonline readers chose the option that property “can be dangerous”, many of whom clearly recall the lessons of the late 80s and early 90s when hundreds of thousands of homeowners fell into negative equity.
Worse, many saw their homes snatched by lenders fed up with customers stuck on mortgages they couldn’t afford as interest rates rose to a level beyond their means.
In total some 57.2% intimated they would be investing in property in the short-term.
If you would like to comment on this story or speak to its author, telephone Simon Read on 0207 034 2680.IFAonline
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From 6 April 2019