Property in prime central London (PCL) has outperformed a range of other asset classes (including gold, farmland, antique jewellery and the FTSE 100) over the last 30 years.
That’s according to research from Knight Frank, which revealed that investing £100 in prime central London property 30 years ago would now be worth £575, with farmland in second place at £476.
Collectible items of modern furniture followed closely behind at £472, then stamps (£395) and antique jewellery (£345).
Tom Bill, head of London residential research at Knight Frank, commented: “While prime London property prices have tailed off in recent years in response to tax changes and political uncertainty, the data shows that residential property remains a good long-term store of value.”
He said that although the uncertain political backdrop is keeping activity in check, prices have largely adjusted to higher taxes – leading Knight Frank to believe the market is ‘well-positioned to strengthen’.
The data also shows a relative lack of volatility for residential properties. Oil prices spiked and fell during the global financial crisis, and silver mirrored this during the US government debt-ceiling crisis of 2011.
Meanwhile, equity prices have seen recent volatility, with a positive Q1 this year following a poorer Q4 in 2018.
Andrew Shirley, head of rural research at Knight Frank, added: “In a world of uncertainty, farmland offers investors a real sense of tangibility and prices have been climbing steadily for the past five decades, to the extent that they are now relatively divorced from the productive capability of the land.”
