The majority of UK fund managers would have been better off investing in bricks and mortar, despite the stockmarket upswings over the past three years, research has revealed.
Figures from property investment firm Property Partner found that returns achieved by 70 per cent of active funds over the past three years had lagged behind average house price growth over the same period.
Dan Gandesha, chief executive of Property Partner, said the performance of UK property prices in the past three years appeared “stubbornly impressive”, particularly when the FTSE 100 ended last year at record levels.
“Over the past few years bricks and mortar has once again proved itself to be an investment to rival them all, capable of significantly outperforming the riskier forays of stock market speculators.”
Analysis, which looked at house price growth across 100 UK towns and cities, found that homeowners in Slough and Watford had made better returns on their property investment since 2013 than every active fund sold in the UK.
Even the top performing Castlefield SLD UK Buffettology fund, named in honour of investment guru Warren Buffett, saw 50.5 per cent growth, compared to an average house price increase of 52 per cent.
Since 1996, average property prices have gone up 304 per cent, while the FTSE All Share climbed by 270 per cent.
Mr Gandesha pointed out that active fund managers use vast amounts of in-depth research to find hidden value in companies, but that residential property investors have still managed to beat most stockpickers simply by sitting on their property.
“It is no surprise that property remains a key area of focus for private investors.
“Over the past 20 years residential property has been a lower risk, less volatile and more profitable investment than investing in the whole basket of UK companies.”
katherine.denham@ft.com
