Over the last 55 years the average ratio of house prices to the FTSE all share index has been 45.6 (Nationwide House Price Index). The ratio is now standing at about 56. During the '90's the ratio was in the 20's and 30's. I don't know if this ratio is an accurate indicator of relative value, but it suggests the housing market is much more over valued than the stock market. With the P/E ratio of FTSE 100 companies at their present level I plan to be cautiously invested in equities and have about 10% - 15% in cash. My feeling is that over the next 5 years house prices will decline in real terms by about 40%. Equities will go up by about 20% in real terms over the same period. A good a guess as any? unsure.gif