Investors scramble for property in the face of recession – study

23 November 2020 | Investment

Investors scramble for property in the face of recession – study

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.

Its survey of more than 1,000 UK-based investors – all of whom have investments and savings in excess of £10,000 – has revealed their thoughts on the UK economy and the country’s position as an investment hub.

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

With Brexit negotiations stalling, over half (53%) are expecting a no deal outcome by December 31 2020.

Only 42% of investors believe the UK will remain a global investment hub following Brexit and Covid-19. This compares to just over half (51%) who feel UK property will remain a sound investment regardless of Brexit and Covid.

With the stamp duty holiday coming to an end on March 31 2021, 40% of investors expect house prices to increase next year, compared to just 19% who expect them to fall.

According to Jamie Johnson, chief executive officer of FJP Investment, the economic disruption caused by the pandemic ‘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,” he says.

“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.”

He adds: “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.”

This post has originally been featured in Property Investor Today.