Net Yield On Residential Property Still Beating Equities
Rightly or wrongly, more and more people are looking to property as a secure investment because they see the stock market as too volatile, they’ve been stung by the endowment scandal, the split cap scandal, the collapse of Equitable Life etc, but most of all, they don’t trust the government on pensions.
And the closing of many final salary schemes is just one more reason why people look to property to provide a safe home for their money. (Memories of the property crash of 1989-1995 when London prices fell over 30% are clearly fading)
And although property looks highly valued now on some measures, it doesn’t on others.
Take a look at property yields for example.
The current net yield on private residential sector is about 3.5% now - which is still slightly above the yield on UK equities - which according to the Council of Mortgage Lender’s Housing Finance journal “does not suggest the UK property market is seriously overvalued.”
At least not on that measure!
But of course you can prove black is white with statistics.
Main site at www.lettingfocus.com
And the closing of many final salary schemes is just one more reason why people look to property to provide a safe home for their money. (Memories of the property crash of 1989-1995 when London prices fell over 30% are clearly fading)
And although property looks highly valued now on some measures, it doesn’t on others.
Take a look at property yields for example.
The current net yield on private residential sector is about 3.5% now - which is still slightly above the yield on UK equities - which according to the Council of Mortgage Lender’s Housing Finance journal “does not suggest the UK property market is seriously overvalued.”
At least not on that measure!
But of course you can prove black is white with statistics.
Main site at www.lettingfocus.com
This entry was posted by lettingfocus, on
Tuesday, December 05, 2006.
