This is according to the latest House Price and Affordability Index from FindaProperty.com which found that since the start of this year, average property asking prices have risen by £4,617, roughly in line with CPI inflation at 2.2% and therefore outperforming other investments including instant access savings accounts and the FTSE 100.
The European debt crisis and the removal of the United States’ AAA credit rating have sent equity markets plummeting. As a result the FTSE is currently 13.7% lower than it was at the beginning of the year.
With interest rates remaining at rock bottom throughout 2011, savings accounts have not performed well either, with the average instant access account offering returns of just 1.04%.
Prices for houses have beaten inflation so far this year, with asking prices rising 2.3%. Asking prices for flats have increased by 1.7%.
Prices for UK properties are currently £4,617 higher than they were in January, but asking prices experienced a 0.3% decline over the past month, bringing the average property price down by £647 to £220,463. FindaProperty.com believes this is a result of increased stock coming onto the market. Additionally, following price drops earlier this year, recent data from the Land Registry indicates that achieved prices have entered a period of stability.
Regionally, Scotland has experienced the biggest percentage increase in asking prices since the beginning of this year at 6.3%, whereas Wales asking prices rose by just 0.1% over the same period. Every region in the UK has experienced positive price growth overall since January of this year.
Samantha Baden, property analyst at FindaProperty.com, said: “No investment is immune to changes in economic circumstances, but some are more vulnerable than others. In the current economic climate, against a backdrop of high inflation, even maintaining the value of an investment can be difficult but for 2011 so far, the property market has managed to deliver this.
“Since the beginning of the year, property prices have performed well, which is great news for homeowners. Prices may still be below the peaks of 2006 - 2007 and have some way to go before experiencing pre credit crunch growth rates, but given the economic challenges of the past few months, home ownership is shaping up as a worthwhile option for those looking to invest their savings.”
