Property is still the top investment choice

As an asset class, UK property provides one of the most stable and reliable sources of income for investors, holding steady through external headwinds.

Property has been ranked as the eighth best investment asset in terms of percentage growth, but as a medium and long-term option it remains one of the most consistent products in which to invest.

New market analysis by Alliance Fund has revealed the performance of a range of different asset classes over the past 12 months. However, the report points out that many of the leading investment options are those that are heavily driven by external factors, such as the war in Ukraine, making them naturally more volatile.

The top performing investment asset, according to Alliance Fund, was natural gas, which has seen its value rise by 62% since 2021. This is followed by Brent crude oil at 23% growth, while WTI crude oil has increased by 20% in value.

For investors looking at smaller-scale items, luxury watches and fine wine have both climbed in value by 16%. Art, which remains a popular choice among enthusiasts, has seen its overall value increase by 13%, according to the study, while corn ranks seventh with a 12% rise in value.

Property performance over the past 12 months

So in eighth position in terms of value increase is property, which, based on capital gain, has risen by an average 10% over the past year. This equates to a £25,556 increase to £294,559 across the UK property market.

However, it is important to note that this general figure for house price performance across the country certainly does not take into account the fact that some investors have made significantly higher capital gains than this over the past year. Similarly, predictions of a slowdown in growth or even a small fall in house prices will only affect some parts of the market.

Furthermore, property investment is generally entered into for its long-term outcome. Over time, the property market is much less likely to be influenced by the ‘boom and bust’ nature of many other asset classes. While it is of course impacted by external events, many factors mean that supply, demand and therefore prices remain relatively steady.

Ten years ago, for example, in December 2012, the average house price in England was £178,406. This means the average property has gained approximately £116,000 during that time frame, with huge regional and local fluctuations. During this time, there have been periods of growth alongside periods when prices have fallen back, but the end results demonstrates the strength of the market over time.

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A “safer, more consistent investment option”

Iain Crawford, CEO of Alliance Fund, said of the company’s findings: “We are seeing the value of investment assets being dominated by Russia’s invasion of Ukraine. While gas, oil, and corn are often reliable assets, their annual growth in the past year has been greatly exaggerated by the war. Their respective price rises are good news for savvy investors, but very bad news indeed for the world at large.

"Property may only rank as the eighth best investment asset in terms of percentage growth, but it is far more reliable over the medium to long-term than the temporary hikes of energy and crops.

"Indeed, property has historically been one of the safer and more consistent investment options. It is relatively accessible due to a range of buying options, while segments like residential purchases, funds, buy-to-let, and even commercial spaces offer something for everyone.”

If you want to know more about the property investment opportunities we’ve got available at The Prestbury Advisory, get in touch with our team today on 01625 725 779, or email us at contact@theprestburyadvisory.com