{"id":52654,"date":"2022-07-21T08:00:00","date_gmt":"2022-07-21T08:00:00","guid":{"rendered":"https:\/\/finsbury-associates.com\/?p=52654"},"modified":"2023-01-11T04:23:55","modified_gmt":"2023-01-11T04:23:55","slug":"are-holiday-homes-worthwhile-investment","status":"publish","type":"post","link":"https:\/\/finsbury-associates.com\/are-holiday-homes-worthwhile-investment\/","title":{"rendered":"[3-min read] Holiday Homes: Worthwhile Investment or Not?"},"content":{"rendered":"\n[et_pb_section fb_built=”1″ _builder_version=”4.14.8″ _module_preset=”default” custom_padding=”15px|||||” global_colors_info=”{}”][et_pb_row _builder_version=”4.14.7″ _module_preset=”default” custom_padding=”20px|||||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.14.7″ _module_preset=”default” global_colors_info=”{}”][et_pb_text content_tablet=”
<\/strong><\/p>\n Published on 24th February 2022<\/em><\/p>\n <\/strong><\/p>\n Investors have had a lot thrown at them in recent months, with the emergence of the Omicron variant, rising inflation worries, and the prospect of higher interest rates. To these concerns, we can now add the Russian invasion of Ukraine which, aside from the likelihood of human suffering, poses geopolitical dangers for the West and threatens to make our inflation problems worse. Clearly, it is a fast-moving situation which could change very quickly but, at the time of writing, Russia\u2019s military has launched air and missile attacks across Ukraine as well as land incursions in some areas. This followed Vladimir Putin\u2019s formal recognition of the independence of the breakaway republics in Eastern Ukraine and their request for military support.<\/strong><\/p>\n <\/strong><\/p>\n Markets have been volatile in the build-up to the crisis with geopolitical tensions exacerbating investor concern about the prospect of higher interest rates. Central banks look set to end years of quantitative easing and ultra-low rates as they attempt to get a grip on rising inflation, taking away what has been an important support for markets. There had been some light at the end of the tunnel, with economists forecasting that the peak in inflation was around the corner as the impact of the pandemic wanes. However, this peak could get pushed back if oil, gas and other commodity prices continue to rise on the back of the Ukraine crisis. Clearly, one of the big risks would be an interruption in the Russian gas supply to Europe.<\/p>\n Volatility is likely to continue in the coming days, though history does give us some comfort that markets should eventually shrug off these geopolitical concerns and recover. During the Crimean annexation of 2014, investors experienced some volatility, but global equities soon resumed their upward trend as the crisis subsided. Going<\/p>\n back further, global markets had a difficult time in the run-up to the US-led invasion of Iraq but bottomed about a week before the troops went in and spent the rest of the year going up steadily. And even further back, there was a big drop in bourses during the Iraqi invasion of Kuwait in August 1990 when the oil price doubled but markets soon stabilised afterwards. Clearly, all geopolitical events are different and this one is particularly serious, but we are confident that markets will bounce back once tensions subside.<\/p>\n In terms of what we are doing in client portfolios, we continue to take a long-term approach and favour a broad mix of internationally diversified equities alongside lower risk alternatives and fixed income. We have been gradually rotating into sectors that should benefit from higher interest rates such as banks as well as energy companies. However, we continue to favour longer-term growth companies with strong franchises and will look to take advantage of any prolonged volatility. While we are still cautious on bonds our fixed income holdings remain focused on liquidity, security and providing diversification from equities. Rest assured that we are monitoring developments closely.<\/p>\n <\/p>\n Disclaimer:<\/span> <\/strong><\/p>\n Published on 24th February 2022<\/em><\/p>\n <\/strong><\/p>\n Investors have had a lot thrown at them in recent months, with the emergence of the Omicron variant, rising inflation worries, and the prospect of higher interest rates. To these concerns, we can now add the Russian invasion of Ukraine which, aside from the likelihood of human suffering, poses geopolitical dangers for the West and threatens to make our inflation problems worse. Clearly, it is a fast-moving situation which could change very quickly but, at the time of writing, Russia\u2019s military has launched air and missile attacks across Ukraine as well as land incursions in some areas. This followed Vladimir Putin\u2019s formal recognition of the independence of the breakaway republics in Eastern Ukraine and their request for military support.<\/strong><\/p>\n <\/strong><\/p>\n Markets have been volatile in the build-up to the crisis with geopolitical tensions exacerbating investor concern about the prospect of higher interest rates. Central banks look set to end years of quantitative easing and ultra-low rates as they attempt to get a grip on rising inflation, taking away what has been an important support for markets. There had been some light at the end of the tunnel, with economists forecasting that the peak in inflation was around the corner as the impact of the pandemic wanes. However, this peak could get pushed back if oil, gas and other commodity prices continue to rise on the back of the Ukraine crisis. Clearly, one of the big risks would be an interruption in the Russian gas supply to Europe.<\/p>\n Volatility is likely to continue in the coming days, though history does give us some comfort that markets should eventually shrug off these geopolitical concerns and recover. During the Crimean annexation of 2014, investors experienced some volatility, but global equities soon resumed their upward trend as the crisis subsided. Going<\/p>\n back further, global markets had a difficult time in the run-up to the US-led invasion of Iraq but bottomed about a week before the troops went in and spent the rest of the year going up steadily. And even further back, there was a big drop in bourses during the Iraqi invasion of Kuwait in August 1990 when the oil price doubled but markets soon stabilised afterwards. Clearly, all geopolitical events are different and this one is particularly serious, but we are confident that markets will bounce back once tensions subside.<\/p>\n In terms of what we are doing in client portfolios, we continue to take a long-term approach and favour a broad mix of internationally diversified equities alongside lower risk alternatives and fixed income. We have been gradually rotating into sectors that should benefit from higher interest rates such as banks as well as energy companies. However, we continue to favour longer-term growth companies with strong franchises and will look to take advantage of any prolonged volatility. While we are still cautious on bonds our fixed income holdings remain focused on liquidity, security and providing diversification from equities. Rest assured that we are monitoring developments closely.<\/p>\n <\/p>\n Disclaimer:<\/span> We\u2019ve all done it, right? Spent time in a picturesque location in a lovely holiday home and began to ponder what it would be like to own a holiday house there. Many may have even gone a few steps further; contacted local real estate agents and looked on portals to assess what the costs of owning a holiday home would be. Really debating if we could afford it before committing to the daydream of what future summer vacations, not to mention Christmas, spring break, and those long weekends could look like.\u00a0<\/span><\/b><\/p>\n Owning a holiday home, is it <\/span>really<\/span><\/i> the right investment?\u00a0<\/span><\/b><\/p>\n The answer to this complex depends on a number of different factors. It is important for you to consider your unique situation; what is your motivation for buying a holiday home and what are your long-term goals to determine whether this is the right option for you. For example, are you buying somewhere you will eventually retire to but rent out in the meantime? Is this a lifestyle investment? How often will you use the home? Is it easily accessible, and the list goes on\u2026\u00a0<\/span><\/b><\/p>\n It can be very easy to romanticise the idea of spending every school summer holiday in your very own chateaux in the French countryside surrounded by vineyards creating childhood memories for your children; warm days by the pool, beautiful scenery, and cycling to the local boulangerie for fresh bread in the morning. Can your finances meet the dream?<\/span><\/b><\/p>\n Would you be \u201cbetter off\u201d spending a few evenings looking through Airbnb and renting someone else’s holiday home for the week where all you have to do is show up? You don\u2019t have to worry about the cleaning, maintenance, running costs, occupancy during the offseason, and keeping up the 5-star reviews. This also begs the question, as a guest where could you go next? What do you do in the offseason? If you don\u2019t own your own holiday home this would allow you to look at renting another holiday home in the Alps during half term to take the children skiing or a cabin in the snow in Poland for a white Christmas.<\/span><\/b><\/p>\n If you would like to investigate your options a little further, here are some things to consider.\u00a0<\/span><\/p>\n
\u201cInvestors should remember that the value of investments, and the income from them, can go down as well as up and that past performance is no guarantee of future returns. You may not recover what you invest.<\/span><\/p>\n
Quilter Cheviot and Quilter Cheviot Investment Management are trading names of Quilter Cheviot Limited. Quilter Cheviot Limited is registered in England with number 01923571, registered office at Senator House, 85 Queen Victoria Street, London, EC4V 4AB. Quilter Cheviot Limited is a member of the London Stock Exchange and authorised and regulated by the UK Financial Conduct Authority. Quilter Cheviot Limited has established a branch in the Dubai International Financial Centre with number 2084 which is regulated by the Dubai Financial Services Authority. Quilter Cheviot Limited is regulated by the Jersey Financial Services Commission for the conduct of investment business and funds services business in Jersey and by the Guernsey Financial Services Commission to carry on investment business in the Bailiwick of Guernsey. Accordingly, in some respects, the regulatory system that applies will be different from that of the United Kingdom.<\/span>\u201d<\/span><\/p>” content_phone=”Further to our market update webinar on the 7th February 2022, please find below some further commentary from one of our discretionary portfolio managers Quilter Cheviot on the Russian & Ukraine conflict published on the 24th February.<\/strong><\/strong><\/h4>\n
\u201cInvestors should remember that the value of investments, and the income from them, can go down as well as up and that past performance is no guarantee of future returns. You may not recover what you invest.<\/span><\/p>\n
Quilter Cheviot and Quilter Cheviot Investment Management are trading names of Quilter Cheviot Limited. Quilter Cheviot Limited is registered in England with number 01923571, registered office at Senator House, 85 Queen Victoria Street, London, EC4V 4AB. Quilter Cheviot Limited is a member of the London Stock Exchange and authorised and regulated by the UK Financial Conduct Authority. Quilter Cheviot Limited has established a branch in the Dubai International Financial Centre with number 2084 which is regulated by the Dubai Financial Services Authority. Quilter Cheviot Limited is regulated by the Jersey Financial Services Commission for the conduct of investment business and funds services business in Jersey and by the Guernsey Financial Services Commission to carry on investment business in the Bailiwick of Guernsey. Accordingly, in some respects, the regulatory system that applies will be different from that of the United Kingdom.<\/span>\u201d<\/span><\/p>” content_last_edited=”off|desktop” _builder_version=”4.14.8″ _module_preset=”default” header_4_line_height=”1.5em” global_colors_info=”{}”]