UK Investors will not Allow Brexit to Derail their Investment Plans
Almost half of investors are more open-minded to new investments in the wake of record-low interest rates
37% consider buy-to-let an attractive investment in the current climate
New research carried out among over 1,000 UK investors by Market Financial Solutions has revealed how they are approaching their investment strategies as Brexit negotiations begin. It found:
- A mere 9% of UK investors think the onset of Brexit negotiations will derail their investment plans over the next two years
- 39% of respondents – equivalent to 11.5 million investors – see the next 24 months as ample opportunity to execute a short-term investment strategy
- With rental prices forecast to rise by 18% over the next five years, almost two fifths (37%) of investors currently view buy-to-let as an attractive investment
- 45% have adopted a more open-minded attitude to other investment classes because of record-low interest rates
- A third (33%) are taking a short-term approach to investments as a result of the dramatic political and economic events of the past year
- 30% of investors said that during the next 24 months of Brexit negotiations they will consider alternative finance and short-term lending to execute a responsive investment strategy
The UK’s investors will not let the onset of Brexit negotiations derail their investment plans over the next two years, with many adopting a more open-minded and short-term strategy during this period according to new research by bridging lender Market Financial Solutions (MFS). A nationally representative independent survey of over 1,000 investors across the UK revealed that a mere 9% think the onset of Brexit negotiations will derail their investment plans over the coming 24 months. Following the triggering of Article 50 on Wednesday 29 March, 39% of investor – equivalent to 11.5 million people – said they see the two-year negotiation period as ample opportunity to execute a short-term investment strategy that will provide returns prior to the formal completion of Brexit.
MFS’ research uncovered that investors across Britain are ready to use the Brexit negotiation period as an opportunity to pursue different investments. Almost half (45%) of the respondents said that they are taking a more open-minded attitude to other investment classes because of record-low interest rates – which has been held at 0.25% since August 2016. Furthermore, a third (33%) of UK investors are taking a short-term approach to investments as a result of the dramatic political and economic events of the past year. To help them execute a responsive investment strategy in the next two years of Brexit negotiations, 37 % of investors said they are considering alternative finance and short-term lending options.
The survey also found that interest in buy-to-let investments remains high in the current market. Early indicators since the result of the EU referendum showed that the UK’s property market held up resiliently, with property prices increasing 6.2% in the 12 months to January 2017. What’s more, the Royal Institute of Chartered Surveyors has said that rents in the UK will increase by 18% over the next five years. Consequently, almost two fifths (37%) of investors in the MFS study said that they currently view buy-to-let as an attractive investment.
Paresh Raja, the CEO of MFS, said:
“UK investors have spoken loud and clear, signalling their intent to continuing pursuing investment opportunities during the two-year Brexit negotiations that are now underway. However, this research reveals that they are doing so with a more short-term and open-minded mentality, as investors seek different investment types to secure returns before the true effects of Brexit set in.
“Despite tax and legislation reforms directed at the country’s landlords, interest in buy-to-let investments remains high – something spurred on by the health of the property market and unrelenting rental demand. What’s more, within the coming 24 months of Brexit negotiations, a large number of investors are turning to alternative finance and short-term lending options to enable them to execute a responsive investment strategy in light of the long-term uncertainty surrounding Britain’s political and economic landscape.”