It is clear from the research that the public still have much more confidence in property than other forms of investment methods. Nearly half of those questioned (46%) consider property to be the best form of investment in the current financial climate, compared with just 14% who plumped for the security of a building society and a mere 6% who opted for stocks and shares.
Looking at the future, a staggering 68% of British people believe that property will provide the best return over a 25-year period as opposed to just 13% who believe stocks and shares will yield the best return.
Jeff Knight, head of marketing services at GMAC-RFC, says: “This is not really a surprise to those working in the industry as we have seen a continued increase in property investment, via buy-to-let. Many people are investing for the first time, whilst those with investment property are adding to their portfolios. There are different motives for investing in property, for example people are using property to supplement their income and other investment classes now and/or in retirement. Whatever the reason for property investment, I expect this trend to continue, despite what other commentators might say.”
GMAC-RFC's research also shows that if British people had an unexpected windfall of £15,000, half would put it straight into property – such as using the money to fund a deposit for a buy-to-let. In addition, 22% would make home improvements and 21% would use the money to pay off their mortgage. In comparison just 22% would opt for the relative safety of a savings account, a decadent 19% who would go on a spending spree and only 6% would invest in stocks and shares.
Surprisingly, with property investment being so popular, GMAC-RFC's research shows that remarkably few people take full advantage of its potential returns through competitive interest rates. Over three quarters (77%) of those questioned had not remortgaged over the last five years.
For those few that had remortgaged, a third (39%) changed to get a better rate, 31% remortgaged to release equity for home improvements and 12% to free capital to reinvest in further property, be it buy-to-let, a deposit for their children to buy a house or a bigger house for themselves.
Knight adds: “Property has ceased to be just a functional necessity and is now seen as a vital profitable asset. Our research reveals how attitudes have altered from traditional methods of investment. The results highlight how equitable people believe property can be, both over the long and short term, despite talk of a property crash. Property is now being used as an investment in many diverse ways, from those with several properties or buy to let mortgages to those who simply invest in their own home.”