Investors brace for a recession and look to property as a safe haven

The majority of UK investors are worried the government’s handling of Covid-19 and believe 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 GBP10,000, excluding the value of their residential property and workplace pensions

 
It found that over three-fifths (63 per cent) 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 per cent are worried about the impact Brexit will have on their finances. This figure rises to 53 per cent for those with an investment portfolio valued over GBP250,000. And with Brexit negotiations stalling, over half (53 per cent) are expecting a no deal outcome come 31 December 2020. 
 
As a consequence of Covis-19 and Brexit, only 42 per cent of investors believe the UK will remain a global investment hub following teh end of the UK's EU transition period and the global pandemic. 
 
When it comes to real estate, the investors surveyed were more positive. Just over half (51 per cent) 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 per cent annual increase in average house prices.  
 
With the Stamp Duty Land Tax holiday coming to end on 31 March 2021, 40 per cent of investors expect house prices to increase in 2021. This compares to just 19 per cent who expect them to fall. 
 
Jamie Johnson, CEO of FJP Investment, says: “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 GBP150 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.”