We’ve put some of your questions to our team. If you would like to discuss any of them more, please get in touch on 0116 269 6311 or email info@furnleyhouse.co.uk
- What do you think is going to happen with Russia?
There are so many complex factors involved that it is hard to know what happens now. We’re not political or military experts and don’t claim to have any particular insight, but we have set out our main thoughts. President Putin is likely to maintain his grip on power and command loyalty from his military. Taking Prigozhin out of the equation removes one key threat to the regime, but pro-war voices in Russia are now as loud as ever and President Putin may feel emboldened to step up military efforts in Ukraine.
Our central scenario is that the war in Ukraine becomes a frozen conflict that could last for years. Russia has made little territorial gains since the war started and the mobilisation of 300,000 troops in September only just about allows Russia to hold the annexed regions in Eastern Ukraine. Devoting more resources could change this, but it needs to be balanced against the effectiveness of a Ukraine counteroffensive and we find it hard to argue that there will be a much larger mobilisation from Russia (there appears to be little demand for this and may not be feasible, given resource constraints and the government’s other objectives).
- With much Russian money in London now frozen, what impact will this have on the property market?
This is likely to be a significant factor weighing on the high-end of the property market – alongside many others. Another is that data shows high net worth individuals overseas have become much less likely to purchase property in the UK ever since the EU referendum, perhaps due to concerns over ongoing political and economic uncertainty.
Likely to be most significant however is of course the rapid rise in interest rates the world has seen over the past two years. It can be easy to forget, but even the super-rich often rely on borrowing to fund their expensive purchases – especially if most of their wealth is tied up in company stock or other illiquid assets.
- How is change in UK politics impacting the market?
With the next general election still as far out as 18 months away depending on when Rishi Sunak opts to call it, coupled with a lack of clarity from the Opposition as to the outline of their taxation and spending plans, it is not apparent that thoughts of the election are having much of a market impact at this early stage.
The fact that the state of the economy and public finances is highly likely to limit room for manoeuvre whoever wins next time round is also likely to be playing a role in the market’s current lack of interest.
- How does Furnley House benchmark themselves against other companies in the industry?
We constantly review our competitiveness against market returns as a whole and against our peers in the investment management industry. We are currently conducting a comparative survey of our costs compared to local, regional and national peers and are also reviewing what the best metrics are to compare our returns to other investment firms. We intend that a report will be published containing our findings on these fronts later this year.
