Which is a better investment in Reading, Berkshire, UK - house or flat?

I have been looking for a flat to buy in Reading or a house in Caversham.

I have been amazed by how little flats/apartments have gone up in Central Reading. They have gone up c. 5% over the last 5 years for the ones I've looked at , while the whole country's average price has almost doubled.

Houses in Caversham seems to have grown in line with the country.

Of course, it depends on the specific house/flat, but I wonder what everyone's view is on the future prospect of the housing market in Reading.

1. Will houses continue to outperform flats?

2. Why have flats not grown much in value in this area in the last 5 years?

As an investor, if you are in it for the long run I'd say buy a house. As long as you can get rental to cover the mortgage (at least 125%) and with a bit of money left in the bank to cover any eventualities, you should be able to ride the current housing ripple.

This is the time to bargain. Keep an eye on properties that have been on the market for a while. Don't rush into anything. Patience will pay off.

Since the subprime disaster last year and Merril Lynch forecasting that the US has already entered a recession, I think house and flat prices are going to fall in every area of the UK in 2008. If you are thinking of buying for investment, this is definitely not the time to be doing it.

Its good that you are looking at investing in property and it certainly has always been considered a very worthwhile one. However, based on a number of factors at the moment, I, personally would not reccommend investing now. Especially, if you were to consider taking an expensive mortgage and even more so and interest-only one. I know this doesnt answer your question set out, but I keep seeing people jumping to the idea of buying property and not realising the significant changes that are happening.

However, what ever choice you make, I hope it works out for you.