Investors Brace For A Recession And Look To Property

A new independent survey of more than 1,000 UK-based investors has revealed their thoughts on the UK economy and the country’s position as an investment hub in light of COVID-19 and Brexit. It found:

· 62% of UK investors are concerned that the government’s mishandling of the pandemic will result in a long-term recession

· 41% are worried about the impact of Brexit on their finances

· Only 42% of investors believe the UK will remain a global investment hub following Brexit and COVID-19

· However, 51% believe UK real estate will be a sound investment regardless of Brexit and COVID-19

· 40% think house prices will increase in 2021 compared to 19% expecting a decline

The majority of UK investors are worried the government’s handling of COVID-19 and Brexit will have a negative impact on the economy, new research from FJP Investment has found.

The investment firm commissioned an independent survey of more than 1,000 UK-based investors, all of whom have investments and savings in excess of £10,000, excluding the value of their residential property and workplace pensions

It found that over three-fifths (63%) are concerned about the government’s handling of the coronavirus pandemic resulting in a long-term recession.

FJP Investment’s survey also revealed that 41% are worried about the impact Brexit will have on their finances. This figure rises to 53% for those with an investment portfolio valued over £250,000. And with Brexit negotiations stalling, over half (53%) are expecting a no deal outcome come 31st December 2020.

As a consequence of COVID-19 and Brexit, only 42% of investors believe the UK will remain a global investment hub following Brexit and COVID-19.

When it comes to real estate, the investors surveyed were more positive. Just over half (51%) feel UK property will remain a sound investment regardless of Brexit and COVID-19. It comes as Nationwide’s House Price Index for October revealed a 5.8% annual increase in average house prices.

With the Stamp Duty Land Tax holiday coming to end on 31st March 2021, 40% of investors expect house prices to increase in 2021. This compares to just 19% who expect them to fall.

Jamie Johnson, CEO of FJP Investment, said: “The economic disruption caused by COVID-19 clearly has investors worried. With the Bank of England downgrading its latest GDP growth forecasts and announcing a further £150 billion economic stimulus, investors are concerned there is still a long way to go for the UK to overcome the pandemic-induced recession.

“At the same time, the lack of progress between London and Brussels on Brexit negotiations is posing further challenges. A no deal Brexit is looking increasingly likely, and this uncertainty is making it difficult for investors to plan for the future.

“Despite these issues, however, our research shows that investors are still positive when it comes to property. House prices have been growing at a remarkable rate recently and many investors are confident this will continue over the course of 2021. This is important – any attempt to stimulate investment and economic growth will be boosted by a vibrant property market. As such, it is vital for the government to implement policies that sustain this interest over the long-term.”