Last Thursday’s conclusive win for the British Conservative party has been widely hailed as an excellent result for U.K. overseas property buyers by the vast majority of real estate agents in the country.
Citing one example, exchanges and offers estimated to be worth well over £200 million happened across Prime Central London as the hours and minutes ticked by during May 8. Many London real estate agents started work from the early hours and worked late into the evening.
More than £100 million worth of luxury residential property was sold across Prime Central London on Friday once it became clear that the Conservatives would lead a government.
Peter Wetherell, Chief Executive of real estate firm Wetherell, said: “We are currently processing some £29 million worth of offers that were made on Mayfair property to us on Friday May 8th straight after the Election, which included a £26.5 million palatial property and another £2.5 million flat, both in Mayfair.
“I’ve had correspondence last Friday and over the weekend with some 70 clients and other property contacts – and all of them have said to me that the luxury London market is now “back in business”, especially with the Mansion Tax and Non-Dom worries now blown out of the water due to the resounding win by the Conservatives.”
Gary Hersham, Managing Director of Beauchamp Estates, was in total agreement.
He said: : “Friday was bedlam; not that I’m complaining as any Prime residential real estate agent loves being at the centre of a hurricane of incoming calls from vendors and purchasers. My mobile lit up like a Christmas tree from the early hours, vibrated and flashed all day, and didn’t stop until it ran out of juice late on Friday night.”
He added that his company is still busy finalising the multi-million pounds of business activity that started on Friday, most notably a £20 million pound property in the West End that exchanged on Friday.
“If Friday is any indication, we will now see a big wave of previously pent up demand unleashed in the London housing market, which will lead to a rise in new instructions and sales across London and the Home Counties in particular, especially in the premium sector of the housing market,” he concluded.
Becky Fatemi, Managing Director of real estate firm Rokstone, said: “Rokstone had exchanges and offers on Prime London property worth £59.7 million on Friday – our biggest set of deals since the rush on the day before Stamp Duty came in.
“In addition to these exchanges, I also had offers on £37.5 million worth of additional property.
“These consisted of a £7.1 million house in South Kensington from a Lebanese buyer, a Saudi family offered £2.5 million for an apartment in St John’s Wood and the flat has sat on the market for the last eight months. Now, suddenly, on Friday an offer was been made.
“I think what Friday indicated we will now see three big waves of sales hitting the London marketplace. The first wave started on Friday and will continue this week and will consist of a stampede of end user buyers frantically pushing to get properties exchanged before vendors decide to increase asking prices as a result of the election.
“The next wave will start later this week which will consist of buy-to-let investors who will go rushing to their lenders this week and then come looking later this week and the week after for opportunities.
“The third wave will hit as we reach the summer and will consist of Middle East and Asian buyers who will be here even longer this summer since Ramadan finishes early this year on 17 July.
“These three waves will push demand by 30 percent over the next four months,” she added.
Jake Russell, Director at Chelsea estate agent Russell Simpson said: “Russell Simpson completed four deals on Friday worth a combined total of £50 million. All four deals were in Chelsea and each hinged on the election result.
“What Friday made very clear was the huge sigh of relief in households across Chelsea the day after the election. The change in mood and outlook on Friday was dramatic; we were absolutely manic on Friday and busy on Saturday.
“For months uncertainty over the election has rolled on as the threat of a Labour-SNP coalition, Mansion Tax, eradication of the Non-Dom status, which has led to the sales market feeling the pinch.
“We have had a number of ready and willing purchasers waiting on the side-lines to see if the Conservatives won on Friday, now that this is clarified Friday was the start of a revitalised property market.
“I believe that most agents across Prime Central London will see exchanges happening regularly over the next two weeks.
“A Conservative government will see the London markets grow in the coming years, which in turn will fuel continued economic growth.”
Guy Grainger, U.K. Chief Executive Officer at JLL, added: “A continued focus on fiscal prudence and deficit reduction will ensure that bond yields and debt costs remain low, providing support for the investment market, the housing market and the wider economy.
“However, the real challenge for the next government is to focus on medium-term measures to improve productivity, which has lagged behind countries such as the US, Germany and France, despite our remarkable rates of job creation.
“This will need to include further investment in infrastructure and skills. But there is a balance needed here; the danger is that ring-fencing health spending, for example, while attempting further fiscal retrenchment, would leave little left for the vital measures that could help our economy become more sustainable.”
Adam Challis, Head of residential research at JLL concluded: “These results provide an even stronger Conservative mandate than under the previous parliament. This is good news for the housing market, particularly in London.”
Elsewhere Mark Ridley, Chief Executive Officer Savills U.K. and Europe, said: “With the election of a Conservative majority government, we expect much of the deferred demand from the pre-election period to flow back into the prime market over the remainder of 2015 and 2016, particularly given that the spectre of a mansion tax is now removed from the market.
“That is likely to result in a much more buoyant prime housing market over the remainder of the year.”
Adding to the conversation, Andrew Langton, Chairman, Aylesford International, said: “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.
“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.
“This is a memorial day in the English property calendar.”
Alex Newall, Managing Director, Hanover Private Office, said: “Britain is open for business and this is good news for the property market. The Conservatives are safeguarding the U.K. economy and the impact on the property market will be significantly positive.
“International interest in the U.K. 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.
“My advice is to investors to move quickly. Now is the time to invest into the UK, as there will be a spike in activity and the volume of transactions, and thus tax receipts from stamp duty.”
Simon Barnes, Simon Barnes Property Consultants, added: “There will be a huge sigh of relief that uncertainty has been lifted from the prime property market in London now that the Conservatives will form a Government for the next five years.
“Markets hate uncertainty and the threat of a Mansion tax, proposals on non-domicile status and changes to property taxes had caused a bottleneck for both 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.”
Martin Bikhit, Managing Director at Kay & Co, said: “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.”
Marlon Lloyd Malcolm, Sales Manager, Lurot Brand said: “This is fantastic news for mews. Lurot Brand, who has for the last three weeks been on more valuations than the previous two months, have been doing so only to help vendors know how to prepare for today’s decision.
“Last week’s win for the Conservatives has led not only to a surge in buyer leads from the major property portals, but should push those vendors off the fence.
“This is a great result for Prime Central London and whatever is going to happen it would be fair to say that the property market in Central London will regain the confidence it has lacked for the last 12 months.”
Echoing previous comments, Mark Pollack, Director, Aston Chase, commented: “This is a great outcome for the property market across the U.K. 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.
“I anticipate a surge in demand resulting in increased transactions and the potential for further 5-10 percent capital growth over the next 12 months.”
In conclusion, Mark Parkinson, Director of Middleton Advisors, summarised the general emotions of London-based real estate agents.
He said: “Few in our industry were admitting it but many people were holding off making a decision until there was a clear decision.
“All the industry chat has been about a government being formed at some distant point in the future and what impact that delay would have on what should be the busiest time of the year in the prime residential market across the UK. No-one was prepared for a Conservative majority, it seemed pointless to even think about it before the result was known.
“There is so much pent-up demand that we expect the London market to re-ignite. The issue will probably continue to be lack of quality supply.
“The prime country market will be the one to watch, even with modest rises in property taxation we will see a surge of activity and a 10 percent rise in prices this year.”
Image source: cgdev.org
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
