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WEDNESDAY 9TH FEBUARY 2005
 INVESTORS STILL KEEP FAITH IN UK PROPERTY

Despite the recent slowdown in the housing market, investors believe that property still provides the safest home for their hard-earned money...

According to a recent survey by Invesco Perpetual, 41 per cent of 526 Isa holders said bricks and mortar would provide the best returns in the year ahead, up from 40 per cent last year.

This compares with just 19 per cent who believe that UK Equities are most likely to yield the best returns and 13 per cent who are banking on Fixed Income. Only two per cent of investors have any confidence in US equities.

Neil Woodford, Head of Investment at Invesco Perpetual is most displeased with this news and would be much happier if investors gave up on property and chucked a few quid in his direction - he manages Invesco's Income Fund.

"Whilst residential property has undoubtedly been a good investment over the past few years, it is extremely dangerous to project these returns into the future," he complained.

"Relative to equities, and in absolute terms, the valuation of residential property now looks extremely stretched. I believe that there will be a downward correction in the housing market over the next two to three years.

"In spite of the weaker economic outlook, I am still finding many attractive valuations in the UK equity market and remain confident that my strategy will be one which will continue to make money for my investors in this environment."

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