Sunday 25 September 2016

Tory win to push up London by 20pc

Published 10/05/2015 | 02:30

Prime London prices may rise by a fifth after the election, brokers said.
Prime London prices may rise by a fifth after the election, brokers said.

Markets hailed the Conservative party's win in the UK general election largely because of the certainty it brought, rather than because it was the Tories which won.

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It seems though that the UK property industry is happier with David Cameron in Downing Street rather than Ed Miliband.

The defeat of Labour and evisceration of the Liberal Democrats, the threat of the "Mansion Tax" on homes with a value of more than £2m has been removed, and brokers were quick to say interest in central London properties are likely go up as a result.

Buyers will be flocking to secure prime London residential properties, without the threat of a punitive Mansion Tax, predicted global property advisors CBRE.

"As the Conservatives retain power, the proposed 'Mansion Tax' outlined by Labour and the Liberal Democrats in their manifestos will not be implemented.

"The uncertainty that has caused a hiatus at the top end of the residential market has therefore been removed, and buyers will be taking advantage of securing some of the best residential homes that London has ever seen," CBRE said.

Data from CBRE shows that enquiry and viewing levels on prime properties has been at an all time high, at an average of 7.5 viewings for every offer, with buyers awaiting the outcome of the election results

London-based broker Douglas & Gordon predicted prices could rise bya fifth because of the election result.

Loose monetary policy and a pro-business strategy will attract overseas buyers to the UK, boosting the value of the best properties, the firm said in a report.

Demand for the priciest homes slumped to a five-year low during the election campaign as a proposed "mansion tax" deterred buyers.

Annual growth in the 13 neighbourhoods defined as prime central London dipped to 2.8pc in April from a year earlier, according to Knight Frank.

The new parliament will have a consensus "to encourage wealth creation, foreign inward investment, tight public spending and lower taxes," said Ed Mead, executive director at Douglas & Gordon, said in a report. This will "be a big green light for overseas investors to choose the U.K. in general, and U.K. real estate assets in particular," he said.

Broker Savills is less optimistic about a bounce in values in the best districts.

"Prime London markets were looking much more fully priced than those in and beyond the commuter zone, and will have to operate in a relatively high tax environment," said Lucian Cook, head of UK residential research at Savills.

"It's in prime markets outside London where we expect to see the greatest value increase."

(Additional reporting by Bloomberg)

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