House prices may be down, but don't count them out
- Despite the property downturn, bricks and mortar remain safest bet for your money -
4th Mar 2009
House prices may be falling, but the good news for UK homeowners is that it could have been a lot worse had they put their money in the stock market instead. New figures released today show that the FTSE 100 Index has tumbled at twice the pace of UK property prices, falling 35 per cent in the last 12 months whilst average house prices have fallen 17 per cent over the same period.
Research by Zoopla.co.uk, the UK's leading property information website, reveals that the returns in the UK property market have not only outperformed the stock market in the short term but have also held up better over a three, five, ten and even 20 year period. The starkest contrast being an investor who had put £87,824 (average UK house price in March 1999) into the property market ten years ago and would have made over £110,000 profit on that investment despite the recent fall in house prices, versus someone who had invested the same amount in shares at the height of the stock market bubble and would have seen over £33,000 wiped off their investment.
Alex Chesterman, founder and CEO of Zoopla.co.uk, commented:
"There hasn't been much to cheer about with all the doom and gloom in the housing market of late and homeowners are clearly concerned about the recent fall in home values, but for those looking to upgrade or who aren't in a hurry to sell in this market, property continues to be a great long term investment. Over the past 20 years despite the property market ups and downs and stock market booms and busts, housing has performed 50 per cent better than share prices. For those on the sidelines with cash, our research indicates that property remains the best bet to provide a healthy long term return. And for anyone interested in the UK property market, Zoopla.co.uk is the ultimate resource providing access to properties for sale, house prices paid, current value estimates, local trends and much more."
UK House Prices vs. FTSE 100 Comparison Table
|Date||Avg. house price||FTSE 100|
|Mar 1st 2009||£198,522||3830.1|
|Mar 2008 (1 yr)||£238,959 (down 16.9%)||5884.3 (down 34.9%)|
|Mar 2006 (3 yr)||£212,234 (down 6.5%)||5791.5 (down 33.9%)|
|Mar 2004 (5 yr)||£181,601 (up 9.3%)||4492.2 (down 14.7%)|
|Mar 1999 (10 yr)||£87,824 (up 126.1%)||6177.5 (down 38%)|
|Mar 1994 (15 yr)||£72,994 (up 172%)||3322.9 (up 15.3%)|
|Mar 1989 (20 yr)||£82,297 (up 141.2%)||2017.9 (up 89.9%)|
UK House Prices vs. FTSE 100 Comparison Graph
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Notes to Editors
Zoopla.co.uk is a unique property website offering users information and tools to help them make better-informed property decisions. Our aim is to provide the most comprehensive source of residential property market information in the UK to help buyers, sellers, owners and estate agents alike and give them an advantage in the property market.
In 2007, following the success of bringing DVD rental to the web with LOVEFiLM.com, Zoopla founders Alex Chesterman and Simon Kain realised that the UK property market had yet to fully enjoy the benefits of the internet in terms of its ability to deliver transparency and efficiency. They set out with the mission to transform the property market for both professionals and consumers by:
- offering users FREE access to instant value estimates, sold house prices and local information and trends
- enhancing estate agents' marketing efficiency by providing exposure/leads on a pay-for-performance basis
- helping users find local agents and other property professionals to assist them in the transaction process
- letting buyers make offers on ANY UK home and owners test interest in their homes before choosing to sell
- creating an environment where anyone can ask/answer questions and share their knowledge about homes
We have started by providing FREE value estimates, sold prices and local information as well as letting users add content by editing information and uploading photos. We are the UK's fastest growing property website and by far the largest and most active property community in the UK, with over a million user contributions to our website in 2008 alone. We have already launched some unique features, like TemptMe™ and AskMe™, which allow consumers to gain an insight into the market and discover information they won't find anywhere else. Our estate agent directory, FindAnAgent and our unique AskAnAgent feature allow users to contact local professionals directly for their expertise. Very soon we will begin accepting estate agent listing feeds and delivering buyer leads to agents on a no-risk, performance-based model, making Zoopla.co.uk the most cost-effective way for agents to gain exposure and develop their inventory pipeline.
Our value estimates are calculated using a proprietary algorithm (a secret formula) that we have developed by analysing millions of data points relating to property sales and home characteristics throughout the UK. The algorithm works by comparing relationships between home prices, economic trends and property characteristics in given geographic areas. Our estimates are constantly refined, using the most recent data available from public sources combined with our proprietary used-generated data and a variety of statistical methodologies, in order to provide the most current information on any home.
Zoopla Limited is a privately held company with a highly experienced and proven management team, backed by well-respected angel investors and leading venture capital firms Atlas Venture (atlasventure.com) and Octopus Ventures (octopusventures.com).
- Winner: 'UK's Most Promising Internet Company 2008' (First Tuesday)
- Winner: 'Best Property Website - Gold Award' (Web User Magazine)
- Winner: 'Best Real Estate website 2008' (Websiteoftheyear.co.uk)