Conservative victory reignites London housing market
05-09-2015
Kate Allen, property correspondent
Rows of houses stand on Egerton Crescent in the Kensington and Chelsea borough of London, U.K., on Friday, Dec. 28, 2012. Egerton Crescent, close to Harrods luxury department store in Knightsbridge, is the most expensive address in the borough, with an average property value of 8.14 million pounds ($13.2 million), Lloyds TSB said. Photographer: Chris Ratcliffe/Bloomberg
©Bloomberg
Overseas investors rushed back to the London housing market on Friday, after the Conservative election victory dispelled the gloom that had hung over them for months.
Several estate agents who buy and sell multimillion pound houses reported their phones had begun to ring early on Friday morning with calls from wealthy people around the world who had put off house purchases until the result of the election was known.
Investors had worried about the prospect of a new tax on homes worth more than £2m, which had been proposed by the Labour party.
The removal of this threat of a “mansion tax” meant that the price of expensive homes could now rebound by 20 per cent in the next 12 months, Ed Mead, a director of Douglas & Gordon estate agents, forecast.
The election result would “restore overseas investor confidence in the UK”, triggering what he predicted would be a “surge in [house] values over the next five years”.
“This is a very bullish outcome for London real estate markets at all price levels,” he added.
Giles Hannah of Christie’s International Real Estate said that buyers from Canada, the USA, the Middle East and Asia would buy in London, as they will now “view the market as a haven”.
Price indices have presented wildly contrasting pictures of the health of the housing market — according to some the boom is back, while to others the slump staggers on
A shortage of properties for sale would fuel price rises, he added.
Charles McDowell, an independent buying agent, said he was “hugely relieved” and the result was “an absolute blessing for our business”. He had already received a flurry of phone calls from prospective buyers seeking expensive London homes.
“Up until today, buyers were feeling very nervous indeed,” he said. “Now people feel the UK is open for business and they can invest here knowing it will be stable and consistent.”
Property companies’ share prices were among the biggest gainers as the stock market rallied.
London estate agent Foxtons — which has a reputation for seeking to push up prices in up-and-coming areas of the capital — saw its share price jump by 12 per cent.
Property websites Rightmove and Zoopla and the major housebuilders also gained.
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