221: Soaring property investment puts shares in shade

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PROPERTY investment prices have soared at more than three times the rate of stock market returns in the past decade and at an even faster rate than wages and retail prices, according to new figures.

House prices across the UK have surged 187% since February 1996, while stock prices have risen 61% over the same period, data from Halifax has revealed. The value of Scottish homes has grown at a slower rate than the rest of the UK, but prices have still more than doubled in that period.

The increase in earnings and rate of inflation were even more modest. Nominal earnings rose by 54% and retail prices by 31%.

The smallest increase in house prices in the past decade has been in Scotland. Property vales have risen 110% north of the Border, or 7.3% per annum.

However, Scotland experienced a rise in house prices during the downturn of the early 1990s.

The average UK house price stood at �179,425 in the third quarter of 2006, up from just �62,453 in the first quarter of 1996.

Tim Crawford, group economist at Halifax, Britain's largest mortgage lender, said the southwest of England had emerged as a highly sought after destination, led by Cornwall. It ranked as the top-performing county since February 1996, with a 274% rise in house prices, equivalent to 13.3% per year.

Halifax said sound fundamentals underpinned the housing market, although price increases seen in the past decade were unlikely to be repeated because of affordability constraints.

The figures are sourced from the Halifax house price index, which dates to January 1983.

Source:

The Scotsman