According to the specialist lender of Nationwide, UCB Home Loans, research from brokers believe that property will prove a more successful investment than shares over the next five years.
Their research showed that 55% of brokers thought that property would produce bigger profits, while 45% thought that shares would. Recent figures from Nationwide show that the FTSE 100 grew by 16% in 2005, compared to a growth in the housing market of only 3%. Currently, the FTSE is still around 10% below its 1999 level, whereas house prices are more than twice as high as they were in the same year.
Our view
This is a worrying and dangerous thing. Property, like any other asset class, moves in cycles and at the moment Worldwide equities are stronger. Property will reel around again but perhaps not for another 2 years or so.