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Maike Currie, Fidelity: UK Quarterly House Prices Fall Unlikely to Wane Briton’s Love Affair with Property
Commenting on today’s Halifax house price figures, Maike Currie, investment director for personal investing at Fidelity International, said: “For the first time since November 2012, quarterly UK house prices have fallen by 0.2%.* However, this is unlikely to wane Briton’s love affair with property, as our figures show people are three and a half times more likely to invest in property (56%) than in the stock market (16%). In fact, women are almost seven times more likely to choose property (60%) over investing (9%), according to the Women & Money series from Fidelity Personal Investing.**
When asked ‘property or portfolio?’, UK adults overwhelmingly chose to invest in buy-to-let property, despite a raft of additional tax hikes for landlords and the fact that the UK’s blue chip index, the FTSE 100 rose by 19.7% in the last year compared with just 3.5% for UK house prices (see chart below).***
“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 (see chart below). 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.”
Stock market returns vs Halifax house prices index
Source: Fidelity International
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