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Residential property has been a better investment than cash, shares or bonds over the past decade as landlords in the UK enjoyed returns of nearly 200%.

According to Halifax, UK house prices were up 105% in the 10 years to December 2009, while buy-to-let landlords could have made total returns of 187% including rent. Only by investing in precious metals like gold would you have made more from your money over the last ten years.

The UK stockmarket was only just up over the decade, but after factoring in inflation investors still failed to make a real return. As a result, a buy-to-let mortgage was a better investment that stocks, funds, pensions and ISAs over ten years.

Martin Ellis, group economist at Halifax, says: “Property has still delivered good long-term gains despite recent turbulence. But the poor performance of UK shares, which registered one of their worst decades ever, would make people think harder whether they want to invest in equities”.

So what about this decade? Will buy-to-let investment top all others to be the most profitable UK endeavor? We just don't know – house prices are unlikely to rise as they have over the last ten years but many people will spend the next decade renting rather than buying a home as debt and a slow economy continues to hamper the mortgage market.

Buy-to-let investment is a personal choice – it depends on a number of factors and while the figures look enticing it is still risk. Talk to a buy-to-let mortgage adviser about the pros and cons of property investment over the next ten years.

SOURCE: Halifax, 19/02/10

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