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Property remains 'biggest accumulator of wealth'

Friday, 2 May 2008 6:30 AM

Property remains the biggest accumulator of wealth for Brits, even amid the current market turmoil.

With both Halifax and Nationwide announcing price falls, many homeowners are growing jittery over the direction of the market.

However, Brits will also prefer to own, rather than rent, their property, according to residential letting agent Ludlowthompson.

"Most people see housing as their biggest accumulator of wealth, rather than investing in investment vehicles or pensions, because the growth on investments is changing. Massive changes in taxation laws mean that any growth on investments is taxable," said Stephen Ludlow, director of Ludlowthompson.

"You obviously get 100 per cent tax relief on the sale of your property. As long as that stays in place, you will always get a swing back to home ownership once you have got the fundamentals of the economy right."

While prices have begun to moderate in the UK market, analysts argue fundamentals - including low unemployment, low interest rates and a disparity between supply and demand for property - will ensure the crash does not lead to a wider recession.

"At the moment we are not seeing unemployment across the economy. That would be another blow to the sales market and a blow to the letting market because that would then hit the performance of tenants," said Mr Ludlow.

"At the moment, you are getting good rental rates and you are also seeing good performance from tenants in terms of rental payments."

Chris O'Toole

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