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Property investment hit by rate hikes

Three interest rate rises in five months have shaken confidence in property investment, according to insurance provider Standard Life.Its latest savings and investment index shows that investors' enthusiasm in property for both buy-to-let and long-term savings purposes has been dampened by the Bank of England's recent rate hikes.The Bank's monetary policy committee voted to raise rates in August and October last year before unexpectedly raising them by another quarter-point in January this year.Confidence in homes as a savings vehicle has fallen by 19 per cent since October last year while buy-to-let confidence has slumped by 27 per cent in the same period, Standard Life said."Until January 2007 the Standard Life Savings & Investment Index has shown that property is the most popular investment category in the UK," Standard Life Assurance chief executive Trevor Matthews commented."With interest rate rises having such an immediate impact on investor confidence, I hope that investors will now consider spreading their investments across a wider range of investment categories and vehicles when planning for their financial futures."

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