Election result will fuel UK property market, say estate agents
Estate agents across the UK predict a boost in the country’s property market after the Conservatives won the elections with a majority, albeit it a slender one. They say there was concern among investors regarding a Labour victory, especially property inverstors from overseas.
According to prime central London estate agency Napier Watt, wealthy foreign investors had threatened to boycott the UK capital if Labour were elected. It added that the election outcome signalled that the London and the rest of the UK are open to continued foreign investment.
“It is a vote of confidence in the UK economy and its continued path to recovery,” Napier Watt wrote on its website.
Mansion Tax threat gone
There was alarm among foreign nationals regarding a potential Mansion Tax on top of recent tax changes, including an Annual Charge on property owned through a company and Capital Gains Tax on its disposal. Capital gain refers to the difference between the buying and selling price of an asset.
Many potential buyers had placed their purchasing plans on hold, especially those looking at properties above the £2 million threshold that Ed Miliband was targeting with the Mansion Tax.
The slowdown at the upper end of the market had predictably made its way down to the rest of the market.
With the Tories in power, the risk of a Mansion Tax has vanished – there will be no changes to non-dom status and no additional Stamp Duty costs.
Napier Watt said in a statement, regarding the election result:
“This is all excellent news and will be hugely beneficial to the upper end of the property market in particular.”
“We expect the property market, which has been rather subdued of late as buyers and sellers adopted a ‘wait and see’ attitude, to now pick up. Many people have been holding off making a decision because of the uncertainty, and as we would always expect May, June and July to be our best months with foreign buyers from overseas, we are all set for a busy summer.”
Nobody expected such a clear-cut result
Robert Bartlett, Group CEO of Chestertons, the leading London estate agency, said regarding the election results:
“No one predicted such a clear-cut result, and with some form of coalition looking the most likely outcome before the country went to the polls, trying to predict which policies would be implemented was proving beyond political pundits and property market commentators alike, so homeowners and landlords can be forgiven for feeling in the dark as to which way to jump.”
“Labour and Lib-Dems both backed the introduction of a Mansion Tax on homes worth more than £2 million, 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.”
Estate agents across London and the rest of the country believe that with the spectre of political uncertainty gone, the country’s property market can now move on. Most predict busy months ahead.