Investing in property

You can invest in property directly or indirectly through a 'pooled' or 'collective' investment scheme, like a Unit Trust or Open Ended Investment Company. Property investment carries high risks.

Buying your home or a property to let out is a way of investing directly in property. However, although the Financial Services Authority (FSA) regulates most mortgage sales, it doesn't regulate most buy-to-let mortgages. If you're thinking of investing directly in property as a way of making money it's important to be aware of the risks. In particular, beware of 'get rich-quick' promotions.

Property Open Ended Investment Companies (OEICs) and Property Unit Trusts are schemes which pool investors' funds into one fund which invests as much as possible in property. (The fund invests either directly and/or by buying shares in companies that invest in property). A few of these schemes are regulated, so there are safeguards to reduce the risk of financial loss.

For information about investing in property schemes, and their risks, see the FSA's website.

Some unit trusts, OEICs, investment trusts and life assurance policies include property in the range of funds they invest in. But they also include other investments (shares, government bonds, cash etc) to spread the risk. These sorts of collective investments are regulated by the Financial Services Authority. Their marketing material will tell you which range of funds they invest in.

Property investment carries high risks. It's a good idea to get financial advice before investing in any property scheme.