Property or the stock market?

We recently wrote an article on the increase in the UK’s pension wealth being greater than the increase in individual’s property wealth since 2008.

As part of this exercise we looked at the historic growth in property prices compared with the FTSE.

Since January 2005 the average UK property price has increased at 2.9% per annum (source – land registry) while the FTSE grew at 3.2% per annum.  Both these figures include their respective ‘crashes’ and thus a reasonable comparison and explanation for the perhaps lower than expected returns.

While one can argue that there is no clear winner here, our belief is that neither is an appropriate investment on their own for the average investor. To have all your eggs in one basket is a risky ride!

Diversification is key. Accessing investments with a broad range of investments means returns are more predictable and less volatile.  In the case of buy-to-let property it is certainly less hassle too!