Wealthy still investing in property

Moneyed investors continue to view residential property as an attractive asset class, despite the falls in average values experienced in recent years.

According to a report compiled by Barclays Wealth and the Economist intelligence Unit, which surveyed more than 2,000 high net worth people, 35% of respondents said they planned to invest in more property over the next two years.

Half that proportion said they would reduce their exposure to property.

Graham Nicoll, regional centre head at Barclays Wealth, in Birmingham, said:

“The tumble in property values has shaken even the most seasoned investors’ confidence.

“Despite this, these findings suggest that investors believe we are approaching the beginning of the end of the downturn. It appears that those surveyed are prepared to not only exploit undervalued opportunities, but also to commit further to property over the next two years in the belief that they will benefit from favourable returns.

“However, whilst there seems to be a good deal of confidence emerging, investors should ensure that they don’t overcommit themselves or concentrate their property portfolios too narrowly, whilst there is still a degree of volatility in the markets.

“Wider market data suggests that initial indications of recovery in property could be a false dawn, or the start of a slow upturn. The next 12 months will be crucial in getting a clearer idea of what the longer term property investment landscape will look like.”

Michael Dicks, managing director and head of research at Barclays Wealth, said:

“Even before these planned increased allocations towards property, survey respondents claimed to hold 28% of their portfolios in this asset class. This is significantly higher than we would recommend, suggesting a real need for people to consider diversifying their portfolios to reduce risk levels.”

The report also looked at the issue of gender in relation to property investment, with women proving to be more favourably disposed towards property than their male counterparts.

Of those surveyed, 49% of the women surveyed consider property to be a less risky investment than stocks, compared with 37% of men.

And women are far more apt to find enjoyment in their property investment than men. A total of 44% say that they find buying property more enjoyable than investing in other asset classes whereas only 28% of men feel the same way.