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Property investors often have a key question – is my money better off in property or in some other form of investment?
Many companies try and answer the question – mainly because they want to relieve property investors of their hard-earned cash in return for selling something.
The latest to look at whether a buy to let is worth its weight in gold is property price website Home.co.uk, who take an independent look because they have nothing riding on the results.
Their research concluded that buying gold would probably have given a better return than buying property over the past five years.
Investors tend to turn to gold and other tangible commodities in times of economic turmoil because gold always has a value and is easy to convert in to cash or other goods.
The research did reveal that the lure of property may well outstrip that of gold for investors soon.
Recently, home prices have gained 15% against gold as the amount of gold needed to buy an average house has dropped from 700 ounces in October 2007 to around 225 ounces today.
“Should this trend continue, we could be witnessing the start of a considerable turnaround in the property investment sector. Investors are still enthusiastic about UK property and the principle reason must be that, unlike gold, property offers a return on capital in the form of rent,” said the report.
“On the other hand, perhaps gold is set to surge even higher as the financial catastrophe in the Eurozone unfolds. Only time will tell…”
The current average asking price for a house is £231,998, according to Home.co.uk, while the price of gold is hovering around £1,025 an ounce.
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