Investors Brace for Recession & Look to Property

An independent survey of more than 1,000 UK-based investors has revealed what they think about the UK economy, and the country’s position as an investment hub in the light of COVID-19 and Brexit.

The survey shows:

• 62% of UK investors are concerned that the UK 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.

Most of those who were surveyed are worried the Government’s handling of the Coronavirus and Brexit will have a negative impact on the economy, according to FJP Investment

The investment firm commissioned the independent survey of more than 1,000 UK-based investors, all of which have investment and savings of more than £10,000. The survey also found that more than three-fifths (63%) are concerned about the Government’s handling of the COVID-19 pandemic, which they think could result 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 31^st December 2020.

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

When looking at real estate, investors surveyed were more positive, with just over half (51%) feeling that UK property will remain a sound investment regardless of the pandemic or Brexit. This 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 ending on 31^st March 2021, around 40% of investors expect house prices to increase in the next year, compared to 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.”

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