By Jamie Johnson, CEO of FJP Investment

The journey back to economic normality will be strenuous. COVID-19 has imbued many financial markets with a great deal of uncertainty, making accurate forecasts difficult for fear that a second spike in cases or further lockdown measures may affect market confidence at a moment’s notice.

However, ensuring investor confidence remains high in the short-to-medium term is paramount for avoiding economic stagnation throughout the rest of 2020. Without economic stimulus, the UK’s post-pandemic economic recovery will remain delayed until the virus is contained globally; and given the uncertainty surrounding when this will be accomplished, the economic damage inflicted in the meantime could be grave.

The Government, of course, has been quick to recognise this. It has implemented numerous policies designed to coax activity back to some key markets, most notably in the property sector.

The stamp duty land tax (SDLT) holiday especially seems to be succeeding in attracting buyers back to the market, with property listing site Rightmove recording an immediate 75% increase in buyer enquiries following the policy’s implementation. Meanwhile, Halifax’s August house price index (HPI) revealed a year-on-year average house price rise of 5.2%.

After months of the government dissuading people from moving home due to COVID-19 contagion fears, it seems as though the SDLT holiday is managing to release some of the pent-up demand for property that accrued during lockdown. Domestic and international buyers alike are now compelled to take advantage of the lucrative real estate opportunities on offer, with tax savings of up to £15,000 available during the holiday.

What is crucial, however, is that this momentum is sustained. As COVID-19 case numbers begin rising once again, if people view the UK as not having a handle on the spread of the virus, they may be reluctant to make any major decisions regarding their asset portfolio.

To explore how exactly investors are currently perceiving the government’s capacity for effective COVID-19 containment, and how they are managing their financial affairs during this challenging period, FJP Investment recently commissioned an independent survey of over 900 UK-based investors. Each of the investors surveyed has an investment portfolio in excess of £10,000, excluding savings, pensions, SIPPs and residential property.

What we discovered was that, although the SDLT holiday referenced above is being positively received, there are still obstacles to overcome within the wider economic bounce-back.

Holiday time

Among those surveyed, a quarter (24%) of investors stated they are planning on buying one or more new properties to take advantage of the SDLT holiday, a figure that rises to 43% for those aged between 18 and 34.]

Given the substantial potential discounts available, it makes sense that those keen on making their first step onto the property ladder – or building a real estate portfolio – would jump at the chance while market conditions are right. With the SDLT holiday period coming to a close at the end of March 2021, buyers will be keen on finalising their transactions before this key date.

However, 43% of the investors surveyed believed that more financial incentives and support should be offered by the government. Sticking to the property sector, over half (54%) think the mortgage payment holiday relief scheme should be extended beyond its current finishing date of 31^st October 2020.

Elsewhere, FJP Investment’s research showed that 57% of investors are keen to see more financial relief for businesses that have experienced disruption to their cashflow due to the pandemic.

Facilitating the strong economic recovery

More worryingly for the government, however, is the current lackluster reception of its recent public health strategy. The majority (54%) of the investors surveyed admitted they had lost confidence in Boris Johnson’s government due to their apparent mishandling of the COVID-19 pandemic so far.

Increasing case numbers and unfavourable international comparisons risk deterring both domestic and international investors away from UK property – elongating pandemic-related economic stagnation for the foreseeable future.

Ensuring the government soon regains a reputation for good governance and epidemiological competence, then, should be an absolute priority for government advisers. Prospective investors – not just in property but all manner of UK-based assets – must have confidence their assets will not undergo a surprise devaluation due to factors outside of their control.

Personally, I’m confident that the right decisions will be made and the current boom in demand for UK property will be sustained. Investors will continue to be successfully attracted back to the market, and the UK can enjoy a prosperous real estate market once again – fuelling a wider post-pandemic economic resurgence across the nation.