New research by Invesco Perpetual, has found that investor confidence in residential property is on the increase, despite industry warnings to the contrary. There has been a 1% increase on last years figure of 40%, despite fears about falling house prices.
After property, UK equities will give the best returns in 2005, according to 19% of the investors polled. The company expect that there will be a downward slide in the housing market over the next 2 to 3 years, and believe that investors who usually buy-to-let, typically hold on to a property for ten years or more not seeing property as a replacement for equities, but as a means of supplementing them.
Our view
Expect another interest rate increase to curb enthusiasm.