Please find below our Investment Market Update as at 2nd June 2020.
Blue Sky Investment Market Update
Let’s all do our bit
This is the final call for our Sustainable Investment Webinar tomorrow, 3rd June at 10.30am. Please be sure to join us – we have over 70 clients and contacts registered and its sure to be a valuable session.
We are observing an interesting pattern emerging as we see many of our clients preferring their investments and pensions to encompass something more meaningful. They desire a greater emotional connection to where they invest their money. The lockdown has further fuelled this desire.
Change is uppermost in people’s minds at the moment, and whilst change can be challenging, it also throws up exciting opportunities. Sustainable investing is one of them.
To reserve your place, email firstname.lastname@example.org.
Hopes of a quicker than expected economic recovery are encouraging equity markets. Today, the major indices across Europe are building on the strong gains from yesterday. The premise is that infections may have peaked and the acceleration towards easing restrictions is gathering pace. Spain has had no reported deaths today. We may not always welcome some of the measures, especially those who live on the south coast, but the markets like it.
Property price gloom
Despite all the headlines this morning about property prices falling, we have to look at figures with a sense of perspective. Yes, we have had the biggest drop of 1.7% month-on-month since 2009, but what did we expect? Property moves were frozen.
It will take some time for the property market to recover and it is more intertwined with the economy as opposed to how some sectors are performing on the stock-market. According to Which, Knight Frank forecasts that UK prices will fall by 3% this year, but then bounce back by 5% in 2021, in line with its predictions around the economy. Savills has offered two different predictions depending on the Coronavirus outcome. The first forecasts a 5% drop in prices this year and a 5% rise in 2021, while its second forecasts a 10% fall this year and a 4% rise in 2021.
Like with the Coronavirus predictions, nobody really knows, but we aren’t talking big numbers here compared with some of the earlier forecast of a 25-30% drop in accordance with the worst recession for 300 years! Looking at it another way, this short-term weakness will be an opportunity for younger people to get on the ladder, subject of course to the banks lending. It appears as though larger deposits are required to obtain a choice of mortgage rates as lenders have withdrawn many deals for the time-being. There could be an optimum time between mortgage rates and property prices in the next few months, something to watch, if you are thinking of moving.
Enjoy the webinar tomorrow.
Gary and the Investment Team
Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.