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The FTSE 100 vs UK property

Compared to the UK’s blue-chip index, the much-heralded death of buy-to-let looks overdone
The FTSE 100 vs UK property

“An Englishman’s home is his castle” is a hackneyed way to begin an article about UK property and a slightly redundant expression. Of course, domestic pride may be shared by many English people, but it’s unclear why this should still be singled out as a uniquely national trait. Frenchmen likely feel the same.

It is, however, an apt metaphor for the way many people view their personal finances. In a country where homeowning is a deeply ingrained cultural and political concern, property is usually the largest asset on an individual or family’s balance sheet.

This doesn’t mean house prices are equivalent to wealth. Rising asset prices make homeowners feel richer, but so long as they are the occupier – and would need somewhere else to live if they rented the property out – then higher house prices mean a higher cost of housing. Still, this doesn’t stop people from caring more about the value of property than any other asset class, even though most pension funds have higher allocations to equities and fixed income.

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