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Property no longer a long term investment for many

Property no longer a long term investment for many

Category: Investments

Updated: 26/01/2011
First Published: 26/01/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The number of people who view property as the best long-term investment has fallen to its lowest level.

House prices have dipped in recent months, while the outlook for 2011 is uncertain as well, especially in less popular areas of the UK.

The problematic conditions appear to have put many investors off property, according to the Association of British Insurers (ABI).

While 34% of people said they still considered property to be the best long-term investment in the last three months of 2010, the number has fallen from 49% in the third quarter of the year.

In addition, it is the lowest percentage of people to cite property as the number one long-term investment since the ABI started collating the figures in the third quarter of 2008.

In the property boom, property became the investment of choice, as high demand and easily accessible credit saw house prices soar.

The figures revealed also that as confidence in the performance of property has fallen, savings accounts, stocks and shares and national savings have all seen an increase in favourability amongst consumers.

Helen White, the ABI's acting director of life and savings, said that people should consider their pensions when investing.

"For the vast majority of savers, a pension should be a fundamental part of their savings plan. Pensions attract generous tax relief and, through life styling, can reduce risk as people approach retirement," she added.

"We know that over 40% of people are not taking basic steps to save sufficiently for their retirement. This may be as property, despite this fall from favour, is still seen by many as being their retirement nest egg.

"This is despite the dangers of investing in a single asset and the lower returns on property compared to equities for long term investments."

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