Property or Stock Market?
Despite property market returns being dwarfed by the stock market in 2005, mortgage brokers are still recommending people to invest their money in property.
Over the past twelve months, the FTSE All Share Index rose in value by over 20%, yet, the average UK house price increased by under 5%. Brokers still firmly believe however that property is more lucrative than stocks and shares.
Research for UCB Homes revealed that brokers believe investors will earn more from bricks and mortar in the next five years than they would on the stock markets.
Conducted in December and January with over 500 mortgage brokers, the research revealed that 55% think property would yield larger profits, while 45% opted for shares.
Keith Astill, managing director at UCB Home Loans said: “We are expecting a drop in interest rates some time in early 2006, with house price rises remaining in the zero to three per cent range over the year.”
"The longer-term picture on prices is less clear, but the research shows that brokers are obviously expecting property to outperform equities over the next five years.
"Last year was the first year this century that growth in the equity market has outperformed the housing market," he said, adding: "It was also the first time in five years that annual house price inflation has been in single digits at the end of the year."
The results of UCB’s research could be construed as baffling, considering that most economists believe house prices will not rise by more than 5% in the next year, while only one in three Brits believe house prices will out-perform stocks and shares.
Date: 25.01.06
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