David Cameron is not the only big winner in the UK election, the overseas property sector is also set to benefit, with surging sales anticipated by some industry figures.
The Conservative leader is back for another five years as UK Prime Minister with a surprising overall majority, after pre-election polls had put the party neck-and-neck with Labour. Ed Miliband, who resigned as Labour leader today (Friday 8 May) after the result, had proposed a Mansion Tax on London homes worth more than £2million and take away Non-Dom tax status for some wealthy UK residents that limits the tax paid on overseas earnings.
Property professionals say the UK election result will end uncertainty and reignite the markets and boost overseas demand, particularly in London – and independent property buying agency, Black Brick, has already closed multi-million prime central London property details today.
Camilla Dell, Managing Partner of Black Brick, says, “A lot of people have been holding off from making decisions but, overnight, an enormous amount of uncertainty has been removed from the market. “We’ve already had deals exchange this morning and we’re now moving forward with a potential £22 million transaction. We expect this trend to continue as buyers look to move quickly to avoid potential price rises now confidence has returned and we expect conditions to return to a much more fluid, normal market, particularly in the £2m plus bracket where both buyers and sellers will return.”
As well as providing reassurance to potential Prime Central London buyers, the election outcome will have been welcomed by top-end developers. “This morning a lot of Prime London property developers will be breathing a sigh of relief, luxury developers had a great deal at stake.” However, colleague, Partner Caspar Harvard-Walls, sounds a note of caution. “A lot of our clients are dollar-based, so any rally in the pound will impact London’s value. In addition, the Conservatives have promised a referendum on Britain’s EU membership, while we would expect the UK will vote to stay in, the run-up to the referendum would, again, introduce a dose of uncertainty to London’s property market.”
Andrew Langton, Chairman, of Prime London agent, Aylesford International , says it anticipates a surge in sales over the next few days and calls the result “a memorial day in the English property calendar.” “Thank goodness common sense has prevailed and David Cameron has been totally vindicated. It would appear the Conservatives will now have a well-deserved majority to run this country without the confines of a coalition government for the next five years – alleluia! “We anticipate Sterling will strengthen and UK Ltd will continue to grow with increased employment resulting in an economic recovery which has been a leviathan effort on behalf of George Osborne to date.
The London residential market, which has been the target of so much taxation, will now revert back to stability and we predict a massive surge in activity with at least twelve transactions proceeding over the next few days that were holding back pending this result.
Our prediction is stability after a year of instability and indecision. “The envy taxes planned by Labour of a Mansion tax, the rent cap and the tearing up of non-domicile benefits are hopefully in the bin, and the residential property sector can at last breathe a massive sigh of relief after all the hike in stamp duty, the envelope tax and capital gains tax that has been introduced over the last five years. “Singaporean investors should take huge comfort in the Conservative win particularly where they may have invested in residential property and specifically in the buy-to-let sector. “Cameron is committed to a referendum on the EU which many feel has to be reformed particularly on immigration.
We are staunch fans of many EU policies but as with an old car, it may now require a complete overhaul and even a new engine, but it will gradually increase in value following its overhaul and inevitably run more efficiently.”
Robert Bartlett, Group Chief Executive Officer of leading London-based international agency, Chestertons , says the result lifts the spectre of political uncertainty. “Labour and Lib-Dems both backed the introduction of a Mansion Tax on homes worth more than £2million, which would have disproportionally penalised Londoners, especially those with outstanding mortgages or those in retirement who had prudently invested in property as a nest egg. As a result, many people were holding their breath and waiting before making a decision to buy or sell.
“Likewise, Labour’s proposed new laws for the private rented sector would have seen compulsory registration schemes, direct rent controls, fixed-term tenancies and added overheads for private landlords shortening the supply of decent rented homes and ultimately pushing up rents.
“With these proposals off the table, and the spectre of political uncertainty finally lifted, we can now all move on. We are already predicting the next few weeks and months will be very busy indeed. “There are still issues to be addressed in the property sector in London, not least the need to boost housing supply, make the rental market more transparent and accessible, and unlocking opportunities for regeneration through a joined-up approach to planning and infrastructure delivery. We hope the new Government will continue to work with the property sector and consult properly on proposed changes so together we ensure that any new policies will work as they are intended and can help deliver the long-term sustainable growth and sensible innovations that our industry requires.”
Robert Haigh, Chestertons’ Director of Professional Services, adds that the result will boost foreign investment. “I think it is an excellent result for the stability of the market. People can now move forward and look to the future with certainty. “From a London point of view I think it means foreign investment and relocation to the city will now continue unabated due to the fact that the proposed abolition of non-dom status is no longer a threat.”
Mark Pollack, Director, of top London agency, Aston Chase , says the result is a great outcome for the property market across the UK and could see property prices rise by up to 10% in the next year. “The Conservative victory would seem to reflect a delayed reaction from the electorate to the former banking crisis and financial meltdown presided over by Labour. “Needless to say, with the immediate threat of Mansion tax removed and non-domiciles no longer ‘targeted’ this is inevitably going to result in a spike in the market at all price levels and particularly for the prime/super prime markets which have suffered over the last twelve months or so while international buyers sat on their hands awaiting the outcome of the General Election. I anticipate a surge in demand resulting in increased transactions and the potential for further 5-10% capital growth over the next 12 months.”
Mark Homer, from Progressive Property, says, “As business people and landlords I think we should be pleased. I think we now have a good foundation upon which we are able to weave our rich tapestry.”
Martin Bikhit, Managing Director at Central London sales and letting agent, Kay & Co , says, whatever happens in elections, London continues to thrive, although he admits the UK government faces tough choices. “The threat of Mansion tax, removal of non-dom status, three year rent freeze were policies that clearly didn’t resonate with the voters. An over regulated banking sector and increases in taxes for higher earners would have been bad for Britain as business and investors looked for a more favourable environment to do business. Since we first opened our doors, Kay & Co have witnessed seven general elections and watched six prime ministers come and go. We also know that London will continue to thrive. It’s our capital, the home of Monarchy, Government, Law and Finance. Global businesses will continue to be based here. London will continue as a centre of fashion, food, culture and commerce, making it a vibrant place for people to live.
“The Conservatives are a known quantity and a further five years, bringing more of the same is clearly seen as a positive. The voters think so and the money markets appear to agree. There are still tough decisions that could have an impact on business, the main one being an in/out referendum on membership of the EU. Not having free trade with our European neighbours is unthinkable and there will still be jitters over the threat this could cause.”
Simon Barnes, of London-based Simon Barnes Property Consultants , says the result has released a bottleneck for buyers and sellers. “Now this bottleneck will be released and for the next few months we are likely to see a growth in sales and increased prices before the market settles down to steady growth, hopefully for several years. “Biting the hand that feeds you has never been a good idea. Over the last nine months, the threat of further taxing rich investors and property owners risked cutting off a huge supply chain in London.
Regeneration projects, new building and associated infrastructure all require the confidence of businesses, investors and developers.
The election outcome will provide that confidence, ensuring that London continues to thrive and grow.” Founder and CEO of eMoov.co.uk, Russell Quirk, says the result will lift prime sales. “Those at the top end of the UK property market will be breathing a sigh of relief having avoided a hefty, Labour lead, Mansion Tax.”
Alex Newall, Managing Director, of London and UK agent, Hanover Private Office adds, “Britain is open for business and this is good news for the property market. The Conservatives are safeguarding the UK economy and the impact on the property market will be significantly positive. “At the higher end of the property market all those house buyers both UK and international, who have held off investing in the UK pending the result of the election will be returning to the market. Uncertainty over taxation has cleared. “International interest in the UK as a safe place to invest, will continue. London has always been a great place to live, and the sign is firmly above our door – Britain is open for business and open for a stable and growing property market.”