HOUSE PRICES UP BY £15,000
Investing in property is the best way to save say experts
BOOMING property values make homes Britain’s No1 investment, finance experts said last night.
House prices rose an average £15,000 last year, far outstripping the returns on a savings account.
The official figures were seen as further evidence of the wisdom of buying your own home.
Investing in bricks and mortar will prove far more profitable in the long term than paltry interest rates offered by banks since the credit crunch of 2008.
And the booming housing market means property is forecast to play an increasing role in pension planning for retirement.
Estate agent Alex Gosling said: “Savings accounts offer pitiful returns and you can see why bricks and mortar have an enduring appeal.
“Property has proved to
be extremely resilient in the face of some pretty seismic news events over the past 12 months, such as the Brexit vote and the Trump result.”
Mr Gosling, the CEO of online estate agents House Simple.com, added: “Many people in this country see their home as their pensions.
“This is hardly surprising when you consider the alternatives for investing for the future and retirement.
“We have more confidence in property than we have in the stock market, because we have the reassurance of knowing that even if property prices dropped, there is still an underlying asset.
“Doom-mongers expected tax changes on buy-to-let to dampen that market.
“But landlords haven’t run for the hills – the appeal of rental income and capital growth can’t be matched by any other investment.
“It will take a lot for the British to fall out of love with bricks and mortar.”
The typical UK property value was £220,000 in December, a £15,000 increase compared with a year earlier, according to the Office for National Statistics. The main increase was in England. Prices rose by 7.7 per cent over the year to December to an average of £236,000.
Wales saw a leap of 4.7 per cent to £148,000, while Scotland rose 3.5 per cent to £142,000. In Northern Ireland the price of a three-bedroom semi hit £125,000 after a 5.7 per cent hike in 12 months.
“Investing in bricks and mortar is providing a substantial return – and with demand high, house prices are bound to inflate even further,” said Rachel Springall, finance expert, at comparison website Moneyfacts.
She added: “Savings rates are appallingly low right now and inflation is rising, so savers with a substantial amount to invest would be wise to seek financial advice.
“To earn £15,000 in a year, a saver would have to have £300,000 and find an interest rate of five per cent.
“No standard savings accounts offer that return for that investment.”
Based on the average High Street easy access account rate of 0.15 per cent – offered by Bank of Scotland, Barclays, Halifax, HSBC, Lloyds Bank, Nationwide, NatWest, RBS and Santander – an investment of £300,000 would earn just £450 in a year.
Steve Wilkie, head of retirement specialists Responsible Life, said: “Property is likely to play an increasing role in retirement – especially now that pension freedoms give more people flexibility as to how and when they take their pension income.”