Just 7% of investors now believe that the property sector offers the best return on investment, research by online financial services provider Ample shows.
The figures taken from Ample's Investor Sentiment Barometer, independently researched by TNS, showed a 5% reduction in investor confidence in the property market compared to the previous month.
Ample's Investor Sentiment Barometer indicates that the three quarter-point rises in interest rates since November 2003 may finally be starting to erode the investment community's positive attitudes towards the property market.
Ample CEO Tomas Carruthers says: “These figures reflect a growing unease about over-commitment to property as an investment choice. Most of those who buy-to-let, borrow in order to buy. These costs of borrowing are rising and someone who buys now, at inflated prices and higher interest rates, will barely cover the cost of the borrowing with the rents they collect.”
By contrast, Ample's research shows that investor sentiment towards overall investment growth prospects in the UK is still very strong. Three-fifths of Ample users (60.1%) described the UK's investment growth prospects as either good or very good, although this was down very slightly from last month by about 1%.
Nearly one in five of Ample's 1.4 million user base believe that the drugs and healthcare sector offers by far the best growth prospects for the next year. Energy and mining is next choice for over one in 10 users, followed closely by IT (8%), then financial services (7%) and property (7%).