Confidence falls in property investments

House price falls and the mortgage drought have led to a steep drop in the number of people who think property is the most reliable long-term investment.

The proportion of people who think bricks and mortar is the best home for their cash fell by nearly a third during the final quarter of 2010, according to the Association of British Insurers (ABI).

Only 34 per cent now rate property as the best long-term investment, down from 49 per cent in September and the lowest level since the ABI first began collecting the figures in September 2008.

People are increasingly putting their faith in savings and investment products, although property still remains the most popular place to invest money overall.

The number of people who favoured savings accounts rose from 11 per cent to 18 per cent during the period while the popularity of equity investments and ISAs increased from 9 per cent to 14 per cent.

Around 7 per cent of people said they thought the Government-backed National Savings and Investments was the best long-term home for their money while 3 per cent of people said they would opt for wine, art, antiques or other alternative investments.

But 24 per cent of those questioned admitted they did not know what would be the best long-term investment.

The popularity of property comes despite the fact that equities have produced higher returns than bricks and mortar during nearly every 20-year investment period between 1960 and 2009.