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Investors hunt debt and lending opportunities to buck Brexit slowdown, says report

Just under half of investors are looking for short-term opportunities to beat Brexit and weak interest rates.

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Almost half of all investors say they are looking for short-term opportunities in a bid to boost anemic returns caused a Brexit slowdown and a decade of weak interest rates.

Forty-four per cent of investors said they were searching for investments of up to three years to boost earnings against a backdrop “political and economic uncertainty caused by Brexit”, according to a report commissioned by property investor FJP Investment.

It added that 36 per cent would consider debt investment, such as bonds, mortgages or personal loans, because of “the low 0.75 per cent base interest rate makes debt investment an attractive option for the money they currently have in savings”.   

Earlier this week, the UK economy contracted by 0.4 per cent in April from the month before due to “a dramatic fall” in car production and an easing of Brexit-related stockpiling by manufacturers, according to the Office for National Statistics (ONS).

Default fears

Investors continue to be stung by interest rates at historic lows of 0.75 per cent, which last rose in August 2018 and was only the second rise since March 2009.

Property peer-to-peer platforms who lend to developers offer annual returns that range from 3 per cent to 15 per cent a year for investors.

However, despite these low rates 67 per cent of investors said they are “wary” of the higher returns of debt investing “amid fears that borrowers will not be able to make their repayments”, said the FJP Investment commissioned report.    

FJP Investment founder chief executive Jamie Johnson said: “Debt investment presents many benefits, particularly amid low interest rates and Brexit uncertainty, as our research shows. It can provide regular returns over several years, which will attract those keen to make their money work harder without committing to long-term investments.”

FJP Investment, founded in 2013, said its report is based on a commissioned independent survey of more than 950 UK-based investors.

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