House prices in the three months to April 2017 were 0.2% lower than in the preceding quarter, according to Halifax – the first quarterly drop since November 2012 – but new research reveals that Brits’ love affair with property is not over.
In a poll by Fidelity International asking whether people would prefer to invest in property or a portfolio, Brits picked property, despite unfavourable changes to taxation for landlords and the fact that the UK’s FTSE 100 went up by 19.7% in 2016 compared with just 3.5% for UK property prices.
The research found that Brits are three-and-a-half times more likely to invest in property - 56% of the 2,000 UK adults polled would prefer to invest in buy to let, only 16% favoured the stock market, and 28% would choose neither.
And when it comes to women, the difference is more striking: 60% would favour property while just 9% would invest in the stock market. Click the graph below to enlarge.
Commenting on Halifax’s latest figures, Maike Currie, investment director for personal investing at Fidelity International, warns: “Investing in property has historically been dubbed as a ‘safe as houses’ option, but in recent years the UK stock market has far outpaced the buoyant property market. While past performance is no guarantee of the future, today’s data shows house prices have fallen, causing concern that the property market is being pressurised by stretched house prices compared to our earnings.
“Other factors likely to weigh on the property market include rising inflation and stagnant wage growth. If inflation sees the Bank of England push up its base rate, the psychological impact on the property market could be significant,” she adds.