Brexit puts investors off making decisions

Brexit puts investors off making decisions

Almost half of UK investors are putting off major investment decisions until Brexit has been resolved, research has found.

A survey commissioned by mortgage provider Butterfield Mortgages found 43 per cent of investors were reluctant to make any big investment moves until the realities of Brexit are understood.

The survey, conducted in October 2019, comprised responses from 1,136 UK adults with investments in excess of £10,000 excluding pensions, savings, Sipps and properties they live in.

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According to the study, UK investors are turning to traditional assets due to the political uncertainty currently facing the country.

The most common assets investors are holding were stocks and shares (53 per cent), followed by property (41 per cent) and bonds (30 per cent).

On the other end of the spectrum, classic cars (16 per cent), cryptocurrencies (17 per cent), and art and forex (both 19 per cent) ranked as the least popular.

When it came to non-traditional asset classes, nearly two thirds (64 per cent) of investors said they were sceptical that cryptocurrencies were a safe or reliable investment, with 10 per cent of those that have invested in the asset planning to reduce their exposure in the new year.

Martin Bamford, client services director at Informed Choice, said it was only natural that investors are nervous about how to invest in the current climate.

He said: “People aren’t just putting off investment decisions, they’re pretty much holding back on every major financial decision until Brexit is resolved.

"We hope the General Election will give us some more clarity, but in the long-term I expect investors will be looking to diversify their portfolios and look to more global assets."

The survey found while half of respondents (49 per cent) said they were confident in the long-term performance of UK-based assets, a fifth (23 per cent) said they were looking to invest in assets based outside the UK in 2020 due to uncertainties surrounding Brexit.

Meanwhile, nearly two thirds (61 per cent) of respondents believed traditional assets such as property were best positioned to deliver stable and secure returns, with 20 per cent keen to increase the amount invested in real estate in 2020.

Looking at the factors influencing investors’ future strategies, 43 per cent said they have become more socially and environmentally conscious and believed this would drive their investment decisions next year.

Alpa Bhakta, CEO of Butterfield Mortgages, said: “The fact a significant proportion of investors are planning to increase investment into property in 2020 shows that despite Brexit demand for real estate remains resoundingly strong. 

“Interestingly, the factors influencing financial strategies are also changing. On top of security and stability, investors are also taking into account the environmental and social impact of their investments.

"This will evidently be an important trend over the coming years, and is something both financial services firms and advisers will need to pay attention to in 2020."