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Investors Stall On New Deals But View Property As A Secure Asset

Investors Stall On New Deals But View Property As A Secure Asset
26th May 2020
 

More than 850 UK-based investors have been surveyed to uncover their property investment plans in light of COVID-19.

All of the investors surveyed have investments in excess of £10,000, excluding property, pensions, savings or self-invested personal pensions (SIPPs).

Many UK investors planning on buying or selling properties in 2020 have put their plans on hold as a result of COVID-19, according to the survey conducted between 1-4 May 2020. But the majority of respondents still consider property as a safe and secure asset at present.

 

 

“With the government allowing real estate sales to go ahead again by relaxing social distancing measures this week, it will be interesting to see whether this affects investors’ attitudes.”

–Jamie Johnson

CEO, FJP Investment

 

Millennials put property-buying plans on hold

 

FJP Investment, who commissioned the survey, found that 20% of investors were planning on buying one or more properties in 2020 but will no longer be doing so as a result of the coronavirus pandemic. This figure nearly doubles for millennials – 39% of those aged between 18 and 34 have put their property-buying plans on hold. 

Similarly, the research found that 19% of investors were planning on selling one or more properties in 2020 but have since decided not to. More generally, 43% are not making major financial decisions until the pandemic has passed.

However, despite some hesitancy about pushing ahead with investments, the research showed almost half (48%) of UK investors still view property as a safe and secure asset in the midst of the current crisis, compared to just 12% who do not; the remaining 40% are unsure.

Jamie Johnson, CEO of FJP Investment, said: “Today’s research demonstrates just how COVID-19 has affected people’s property investment plans. There is a clear reluctance to engage with the market right now from both buyers and sellers, despite the fact real estate is still regarded a safe investment avenue in this volatile period. 

“With the government allowing real estate sales to go ahead again by relaxing social distancing measures this week, it will be interesting to see whether this affects investors’ attitudes. Far from being business as normal, I believe prospective buyers and sellers will still tread with caution in the coming month. However, once there is more certainty about the future, it seems likely there will be a rush of activity in the property market.”

 

42% of investors are pleased with government response to COVID-19

 

On 19 March 2020, the Bank of England cut the base interest rate to an all-time low of 0.10%; according to FJP’s study, this decision has encouraged 44% of investors to consider new investment opportunities so they can make their money currently sat in savings accounts work harder.

The survey also found that more investors are satisfied with the UK government’s response to COVID-19 (42%) than are not (31%). Moreover, the positive sentiment towards the government was more common among investors aged over 55 (46%) than it was among those aged between 18 and 34 (34%).

32% of investors surveyed said they are confident that financial markets will recover quickly once the pandemic has been contained – almost the exact same number (33%) disagree with this sentiment. A greater proportion of male investors (36%) than female investors (26%) held the more optimistic position.

Over a quarter (27%) of the respondents are planning to purchase stocks and shares that have fallen significantly in value so far in 2020, with a view to holding these investments until they recover in price.

This strategy is particularly prevalent among younger investors – 43% of investors aged between 18 and 34 said they planned to do this – compared with those aged of 55, where the figure falls to just 12%.

Picture: A photograph of a set of keys in the palm of a person's hand

Article written by Ella Tansley – published 26th May 2020

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