Property still a top performing investment!
Investing in UK’s residential property is still proving to be the most profitable.
One of the most fascinating things about residential property is it’s ability to outgrow the other investment asset class decade after decade. You look in history and compare the main asset classes, Property, Commodities, Cash, Equities and Fixed Interests… and the only one that comes close to competing is commodities.
What is it that gives property the advantage over other investments
1. It’s most basic advantage is “need”
We need, must live somewhere, while we do not “need” in such a great way any other asset.
It’s only when you breakdown the asset classes that residential property has a competitor. This competitor is precious metal from the commodities class and it too has an advantage “desire”…and looking at the results, desire is a strong advantage!
2. You gain with two rather than one potential profit streams.
The rental income combined with capital growth has most of the other investments beaten, simply because they only make capital gains so you are solely dependent on the the value you sell them at to make money. (there are a few exceptions, one being stocks and shares where on some you can receive dividends while you own the shares)
The results are:
|
Asset class returns over 1 and 10 years As at December 2009 |
1 year % |
10 year % |
10 year average % pa |
|
Precious Metals |
42.4% |
242% |
13.1% |
|
UK Residential Property |
8.7% |
187% |
11.1% |
|
Commodities |
33.4% |
137% |
9.0% |
|
UK Commercial Property |
-1.4% |
75% |
5.8% |
|
UK Bonds |
3.7% |
70% |
5.5% |
|
Cash |
1.0% |
57% |
4.6% |
|
International Bonds |
1.0% |
57% |
4.6% |
|
UK Shares |
30.1% |
18% |
1.6% |
|
International Shares |
26.5% |
-8% |
-0.8% |
|
Average |
16.2% |
93% |
6.1% |
Source: Datastream, Halifax. Click here for full details.
The conclusion is:
Invest in property?
