Wealthy investors are still loyal to property as an asset class, according to a new report.
Barclays Wealth and the Economist Intelligence Unit surveyed more than 2,000 high net worth individuals and found that despite the turmoil which has hit the sector, twice as many respondents – 35 per cent – said they plan to increase their property allocation over the next two years, compared to those planning to decrease it.
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 per cent 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 examined the distinct role gender plays when investing in property.
A total of 49 per cent of the women surveyed consider property to be a less risky investment than stocks, compared with 37 per cent of men.
In addition, women are much more likely to enjoy investing in property than men. A total of 44 per cent say that they find buying property more enjoyable than investing in other asset classes whereas only 28 per cent of men feel the same way.