Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong.
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Risk Summary

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  • You could lose all the money you invest
  • Most investments are shares in start-up businesses or bonds issued by them. Investors in these shares or bonds often lose 100% of the money they invested, as most start-up businesses fail.
  • Checks on the businesses you are investing in, such as how well they are expected to perform, may not have been carried out by the platform you are investing through. You should do your own research before investing.

You won't get your money back quickly

  • Even if the business you invest in is successful, it will likely take several years to get your money back.
  • The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
  • Start-up businesses very rarely pay you back through dividends. You should not expect to get your money back this way.
  • Some platforms may give you the opportunity to sell your investment early through a 'secondary market' or 'bulletin board', but there is no guarantee you will find a buyer at the price you are willing to sell.

Don't put all your eggs in one basket

  • Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.

The value of your investment can be reduced

  • If your investment is shares, the percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
  • These new shares could have additional rights that your shares don't have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

You are unlikely to be protected if something goes wrong

  • Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker.
  • Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here.

If you are interested in learning more about how to protect yourself, visit the FCA's website here.

For further information about investment-based crowdfunding, visit the crowdfunding section of the FCA's website here.
Weekly Briefing: UK Housing Market Returns to Pre-Pandemic Levels, UK Inflation Eases, Nvidia becomes Wall Street's Largest Company & UK Oil and Gas Production Outlook
Weekly Briefing
Matthew Robineau
· 3 min read
· Updated on

Weekly Briefing: UK Housing Market Returns to Pre-Pandemic Levels, UK Inflation Eases, Nvidia becomes Wall Street's Largest Company & UK Oil and Gas Production Outlook


This week, we delve into topics such as the easing of UK inflation down to the Bank of England target rate, Nvidia's rise to the top of the tech world, the outlook for UK oil and gas production amidst significant investment opportunities and more.

UK Housing Market

UK Housing Market Returns to Pre-Pandemic Size

  • According to Savills, the UK housing market has contracted by 21% in the year to March 2024, largely due to lower levels of market activity. This has taken the total market value back to pre-pandemic levels of £342bn.

  • Despite 15% fewer transactions compared to March 2020, higher average sale prices (up 17%) seem to have balanced the market.

  • Mortgage debt used for home purchases fell by £20.7bn (13%), while equity usage increased by 11%, driven by a 19% rise in spending from cash buyers. Cash buyers now account for over 42% of the total spend on house purchases.
    Source: Savills with data from HMRC, ONS, BoE and HMLR
  • Source: Savills using data from HMRC, ONS, BoE and HMLR
    Interest rate cuts, which could potentially follow now that rates have dropped to the Bank of England's target, are expected to widen the buyer pool and boost market activity over the next 12 months.

  • Lucian Cook, head of UK residential research at Savills, notes, “The market will return to growth as rates fall, despite owners facing higher housing costs as fixed rates end.”

 

UK Inflation

UK Inflation Meets the Bank of England’s Target

  • The UK’s consumer prices index (CPI) inflation has dropped to 2% for the year to May, the slowest pace since July 2021, as per the ONS.

  • Falling food inflation contributed significantly to this decrease, while fuel inflation saw a slight rise.
  • Officials added that core inflation, which excludes food and energy, dropped to 3.5%, in line with most analyst expectations.

  • Analysts believe that The Bank of England (BoE) is likely to hold interest rates at 5.25%, with a potential rate cut expected in September rather than August. Their latest decision is due on Thursday 19th.

  • Martin Sartorius from the Confederation of British Industry commented, “Today’s data sets the stage for the [Bank’s] Monetary Policy Committee to cut interest rates in August. However, rate-setters will still need to weigh the fall in headline inflation against signs that domestic price pressures, such as elevated pay growth, are proving slower to come down”

 

Global Tech Industry

Nvidia Surpasses Microsoft as World's Most Valuable Public Company

  • Nvidia has become the world’s most valuable public company, slightly surpassing Microsoft, driven by a 3% rise in its shares and an over 200% increase in the last year alone. In comparison, Microsoft’s shares rose just 19% in the last year to date.

  • Nvidia’s stock market capitalisation currently sits at just over $3.3Trillion, up from around $2Trillion in February.

  • The chipmaker has seen its stock surge largely due to its leading position in the booming AI processor market, currently holding 80% of the total market share, which Intel and AMD follow behind.

  • Nvidia’s processors are in high demand, outpacing supply as other tech giants like Microsoft, Meta, and Google invest heavily in AI capabilities.

  • The company announced a 10:1 stock split theoretically making shares more accessible to individual investors. This action was completed after market close on June 7th.

  • “Retail investors are the real winners here,” noted Sam North from eToro, attributing the most recent surge to the stock split.

 

UK Energy Sector

UK Oil and Gas Production Potentially Increasing by 30%

  • The UK could boost its oil and gas production by almost 30% by 2030 if £20 billion in new investments is secured, according to Offshore Energies UK (OEUK).

  • The current daily production sits at 1.2 million barrels of oil equivalent. It is projected to decline to 0.7 million barrels by 2030 if no new investment is secured, however, securing all current investment opportunities could stabilise output at 0.9 million barrels per day.

  • “About 60% of the resources yet to be approved could be produced in the next 10 years,” OEUK said. “Around half of the remaining resources are in fields that are already producing, with the others in new fields.”

  • OEUK calls for the removal of the windfall tax before 2029 and ongoing licensing subject to climate compatibility checkpoints to unlock this potential.

  • This important industry, which plays a vital role in Britain's self-sufficiency, supports around 120,000 jobs, vital for the UK's offshore energy sector which includes fossil fuels, wind, carbon capture, and hydrogen.

 

Final Note


This week's briefing highlights an influential period for the UK economy and global tech industry. 

The easing of inflation suggests a stabilising economic environment, especially with increased hopes of rate cuts.

Whilst, Nvidia’s rise underscores the accelerating pace of the AI revolution, positioning it as a leader in the tech sector.

Meanwhile, the UK’s energy future hinges on strategic investments and policy decisions, emphasising the need for a balanced approach to sustainable growth.

These developments signal a positive trajectory for the UK economic landscape as we approach Q3 of 2024, offering numerous opportunities for growth and innovation for UK businesses and investors alike.

At GCV, we remain committed to providing the latest insights into the investment and wider economic landscape in order to support investors in making well-informed decisions when choosing where to allocate their capital.

If you would like to find out more about a number of tax-efficient investment strategies available to UK investors, discover our range of downloadable resources here.
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