For a much smaller minority, however, property investment is something they do without having to buying a roof over their heads. Instead, it involves placing their money in a range of unit and investment trusts that have benefited from the recent recovery in the property market.
The returns, after a decade in the doldrums, are encouraging. The FT property shares index is up 22 per cent on a year ago, against an 11 per cent rise for the stock market as a whole.
Recovery is not exclusive to the residential sector. Commercial property, after suffering its worst recession with both rents and capital values falling in the early 1990s, is now enjoying rental growth again, particularly in the retail sector. A rise in capital values should, so the theory goes, follow not far behind.
Institutional interest in property has revived. British institutions, casting a nervous eye on the giddy heights to which UK and US stock markets have risen, are looking at property as a solid alternative investment. Overseas institutions, most notably the Germans, have been piling in, attracted by high yields.
Returns are mixed and reveal the ravages of recession. TR Property, an investment trust with 27 per cent of assets in direct property and the balance in property shares, shows total returns of 35 per cent in the year to the end of October, but over five years total returns are just 32 per cent.
Barclays Unicorn and Norwich Union property unit trusts, both with around 75 per cent of assets in direct commercial property and the balance in cash and property shares, are up 9 per cent and 14 per cent respectively in the year to the beginning of December, according to Micropal.
Over five years they are up 33 per cent and 41 per cent. Abtrust Property Share unit trust, which holds no direct property, is up 22 per cent over one year and 73 per cent over five years, Micropal shows.
Chris Turner, manager of TR Property, says, "Direct assets are holding the trust back at the moment as shares are racing ahead of property values. Shares normally predict the property market by six to 15 months, so values should be rising next year."
Andrew Thomson, who manages Barclays Unicorn Property Trust, points out property is less volatile in the short term than equities: "It took two to three years to knock capital values in the recession, because the valuation process takes time." By the same token a sustained rise in capital values will not happen overnight. There is always the fear the stock market could be wrong. In 1993-1994, the FT property share index, buoyed by falling gilt yields, spurted ahead to reach peaks it has yet to regain. Property values, despite a flurry of activity, did not follow suit. The dawn proved to be false.
However, with capital values still some 30 per cent below their 1989 peak and yields averaging 8 per cent, Mr Thomson considers now a good time to be getting into property: "Property yields are at or above those on medium-dated gilts, meaning property is priced as a no-growth asset, which it is not." With a little more growth in rental values, yields should reduce and property enter a phase of rising value, he believes.
Over the next two to three years property is looking a pretty safe bet, according to Vince O'Brien, who runs Norwich Property Trust: "For the cautious investor who wants good income with some capital uplift, property is a good low- to medium-risk investment," he says.
He is particularly keen on out-of-town retail developments, where the trust has been strongly positioned for some time.
Planning restrictions limit supply, but retailers are still desperate for space so rents will rise for the foreseeable future, he predicts. The trust is also increasing its exposure to high street retail property in the expectation it will benefit from rising consumer spending.
Mr Turner points out that the glut of excess capacity seems to be ending, although vacancy rates are still patchy. This is not a raging bull market yet, but there are now takers for good quality space.
The improvement in sentiment in the housing market is a good sign, Mr Turner reckons, although the commercial property market may be a year behind. West End offices and out-of-town shopping are the two areas the trust has picked to outperform.
As well as owning shares in companies heavily exposed to these areas, the trust uses direct investment to go overweight. It has two out-of-town retail warehouses in its portfolio.
Abtrust Property Share favours office property in South-east England. Manager William Hemmings says: "They suffered the hardest in recession and because development has been low for a few years there is a lack of supply."
Yields on property trusts vary according to underlying assets. Abtrust at 2.3 per cent points out it is not a yield fund. Norwich and Barclays, because of high direct holdings, yield more than equity funds at 5.75 per cent and 5.1 per cent respectively after annual charges.
Mr Thomson says Barclays' yield should be above 6 per cent, when the trust is fully income-producing.Reuse content