Download Prime UK Property Set For 20% Upswing After Tory Win – Agents

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Prime UK Property Set For 20% Upswing After Tory Win –
Agents
Bullish estate agents believe prime London property and luxury country property could rise a fifth this year, and
double in five years time, as foreign investors plough into UK property.
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UK property investors and British real estate agents alike will have been celebrating this weekend, after the
Conservative Party won an incontrovertible majority to lead the country for a second five-year term.
The news put paid to initial fears of a mansion tax on properties worth more that £2 million (US$3.1 million), which
would have been imposed by the Labour Party. The ban on allowances for non-domiciled residents which we
wrote about here, has been dismissed, although it is possible that a review of these issues may still take place.
The Conservatives have pledged to help restart not just the upper but also the lower echelons of the UK property
market. Prime Minister David Cameron announced plans to help those who are trying to get a foot on the property
ladder by reviving Margaret Thatcher’s ‘right-to-buy scheme’, with lower stamp duty at the affordable end of the
housing market. UK-based banks are to be taxed less heavily than they feared, with Royal Bank of Scotland and
Lloyds to be privatised soon, and so mortgage lending is likely to rise.
At the higher end of the property market, both domestic and foreign buyers will be returning, reckons Alex Newall,
managing director of Hanover Private Office, a London-based prime property buyer.
“Now the political uncertainty has cleared, Britain is open
for business and this is good news for the property
market,” said Newall. He predicts five years of growth,
particularly in the £5 million-plus home counties market
and Prime Central London. He caveated that investors
should move quickly to avoid the spike in prices.
Alex Newall, managing director of Hanover Private Office
Savills, an international agent, forecasts a price
spike of 23 percent in prime London and 24 percent across the prime regions, within five years. Lucian Cook,
Savills UK head of residential research, reckons the hotspots will be in the suburbs outside of the capital, as those
relocating from London find it easier to sell their existing home and take advantage of the price differentials with
the rest of the country. Mainstream property will see an upwards shift too, of 19.3 per cent as a UK average and
+10.4 per cent in London, over the next five years.
Ed Mead, executive director at Douglas & Gordon, is much more bullish. He believes that across the UK, prime
residential asset prices will rise by an average 20 percent in just a year. Over the next five years, £2 million-plus
properties could increase by 100 percent, as major geopolitical uncertainty will drive “significant inward
investment into Prime London residential assets” from all over the world, he said.
Slightly more conservative is Mark Pollack, director of
London real estate agent Aston Chase that specialises in
North West and Central London property. “I anticipate a
further 5-10 percent capital growth over the next 12
months,” he said.
Ed Mead, executive director at Douglas & Gordon
Mark Parkinson, director of Middleton Advisors, agreed that 10 percent
growth this year is likely, due to the “pent up demand”. He agreed that the
prime county market will be the one to watch.
Agents attribute the coming spike to the fact that many investors have
been “sitting on the fence” and putting off buying ahead of the elections.
Simon Barnes, founder of Simon Barnes Property Consultants, believes
that this year will see a dramatic lift in transaction numbers and prices, as
the bottleneck is finally released.
“Market uncertainty had caused a bottleneck for both buyers and sellers.
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,” Barnes
said.
Mark Pollack, director of Aston
Chase
Investment in property funds has been even quicker to recover. Naomi Heaton, chief executive of London Central
Portfolio, a residential real estate fund manager, said that even before the final election results were in she was
receiving calls. “Many have been waiting for this before investing in the private rented sector in Prime Central
London,” she said. “Even on Friday we started to see an upturn in interest.”
But not everyone agrees that the UK property market is out of the woods. Martin Bikhit, managing director at Kay
& Co, pointed out that 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,” said Bikhit.
But others, including Mead at Douglas & Gordon, believe
the concerns are unfounded.
“We do not expect the prospect of this referendum to be a
major dampener on asset values and on any price
weakness for would be buyers,” he said. One thing is for
sure – it won’t be a boring year for the UK property
market, nor for the Conservative Party.
Martin Bikhit, managing director at Kay & Co
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